Understanding Eligibility Criteria for Investing in Sovereign Gold Bonds

Gold bonds

Gold bonds | Image Resource: appreciatewealth.com

Investing in SGB is a popular option for those interested in investing in gold. The SGBs are issued by the Government of India and provide an option for investors to own gold in paper format. You need to meet the eligibility criteria to invest in them.

It is important to understand if you are eligible to invest in the Sovereign Gold Bonds. The eligibility criteria are as follows:

  • You are eligible to invest in SGB if you are a resident of India. You can be self-employed or a salaried employee to be eligible for the scheme. You are allowed to include gold as a part of your investment portfolio.
  • If you are part of a Registered Charitable Institution or a Trust then you are eligible for the SGB scheme. SGB provides an option for them to invest a part of their funds in gold investments in a regulated and secure way.
  • If you are associated with an Educational Institution or a University then you can invest in SGB. SGB allows them to diversify their portfolio and gain from the price appreciation of gold over some time.
  • If you are a Non-Resident Indian (NRI) then you are eligible for the SGB scheme. However, you can purchase SGB in Indian rupees only and by utilising the funds from Foreign Currency Non-Resident or Non-Resident External accounts.

These eligible persons can invest in SGB but it is also important to know about the limit on the number of bonds that can be purchased. The minimum investment requirement is 1 gram of gold and the maximum is 4 kilograms of gold in a financial year for individuals and HUFs. For Trusts and similar entities, the maximum limit is 20 kilograms of gold.

Minors, foreign entities and individuals and persons holding attorney of power cannot invest in SGBs. SGB is a regulated investment avenue and allows only eligible entities and individuals to participate in the gold market.

SGB interest rate

These bonds offer a fixed rate of interest of 2.50% annually. This provides the investors with regular earnings. The bonds have a tenure of 8 years and offer the investors the flexibility to exit after the fifth year.

For other investing options, you can consider the Appreciate app. It allows you to trade online in the stock market.

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