You can invest in Sovereign Gold Bond using the RBI Retail Direct portal


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Those wishing to invest in the eighth tranche of the Sovereign Gold Bond (SGB) can do so using the new RBI Retail Direct portal. “The Sovereign Gold Bond Scheme 2021-22 – Series VIII, which is open for subscription until December 3, 2021, is also available through the RBI Retail Direct portal at https://rbiretaildirect.org.in”, the Reserve Bank of India (RBI) said via a tweet on its official Twitter account.

The current tranche of SGB closes for investment on December 3, 2021.

Until now, bonds have been sold through banks (except small finance and payment banks), Stock Holding Corporation of India Ltd (SHCIL), designated post offices and stock exchanges. recognized, namely National Stock Exchange of India Ltd and Bombay Stock Exchange. Ltd.

Here is an overview of how one can sign up for an RBI Retail Direct account and what a Gold Sovereign Bond is.

What is the RBI Retail Direct program?

Prime Minister Narendra Modi announced last month the opening of the RBI Retail Direct Scheme, which allows individuals to purchase treasury bills, dated securities, sovereign gold bonds (SGBs) and development loans from the ‘State (SDL) directly in the primary and secondary markets.

Who can open the RDG account?

Individuals who are retail investors are allowed to open an RDG account. An RDG account can be opened individually or in partnership with another qualifying retail investor. The Foreign Exchange Management Act 1999 allows non-resident retail investors to purchase government securities; NRIs can therefore also take this route.

How to register for the RBI Retail Direct program to invest in government securities?

Details required to open an RDG account

Individuals can open a Gilt Retail Direct account by logging into RBI Retail Direct at https://rbiretaildirect.org.in.

The account can be opened online using the following documents, according to the Retail Direct website:

  • PAN of individual
  • Bank details in rupees
  • E-mail address
  • Valid mobile number

To register for this program, the person must provide this information and complete a KYC procedure online.

Click here to find out how to enroll in the RBI Retail Direct program to invest in government securities?

What is a sovereign gold bond?

According to the RBI FAQ, SGBs are government securities denominated in grams of gold. They replace the holding of physical gold. Investors must pay the issue price in cash and the bonds will be redeemed in cash at maturity. The bond is issued by the RBI on behalf of the government.

The issue price of the Sovereign Gold Bond (SGB) Scheme 2021-22 has been set at Rs 4,791 per gram, according to a notification from the RBI. For online investors, the Gold Bond would be offered at a price of Rs 4,741 per gram

Minimum and maximum limit of investment in SGB

According to the RBI FAQ: The Bonds are issued in denominations of one gram of gold and in multiples thereof. The minimum investment in the bond will be one gram with a maximum subscription limit of 4 kg for individuals, 4 kg for the Hindu undivided family (HUF) and 20 kg for trusts and similar entities notified by the Government of from time to time per fiscal year (April – March). In the case of co-ownership, the limit applies to the first applicant. The annual cap will include bonds subscribed in different tranches upon initial government issuance and those purchased on the secondary market. The investment ceiling will not include collateral from banks and other financial institutions. In the event of co-ownership, the investment limit of 4 KG will be applied to the first applicant only.

What is the interest rate and how will the interest be paid?

The bonds bear interest at a rate of 2.50 percent (fixed rate) per annum on the amount of the initial investment. Interest will be credited semi-annually to the investor’s bank account and the last interest will be payable on maturity along with the principal.

What are the tax consequences on i) interest and ii) capital gain?

Interest on the Bonds will be taxable in accordance with the provisions of the Income Tax Act 1961 (43 of 1961). The capital gains tax resulting from the purchase of SGB from an individual has been exempted. The indexation benefits will be paid on the long-term capital gains realized by any person during the bond transfer.

Is withholding tax (TDS) applicable on the deposit?

The TDS is not applicable on the bond. However, it is the responsibility of the duty holder to comply with tax laws.

“Each request must be accompanied by the ‘PAN number’ provided by the income tax office to the investor (s),” according to RBI rules. since the PAN number of the first / only requestor is required.

How to make payment

Payment can be made in one of two ways:

a) By using the net-banking / UPI function of the associated bank account, where the funds will be debited at the time of submission of the offer on the portal.

b) Use of UPI capacity, which allows cash to be blocked in the associated bank account when submitting bids on the portal, and then deducted from this account upon successful bid award. Eventually, banks will be able to provide a similar service.


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