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So I need to sell SGBs at maturity or it will be credited to my demat? Suppose I buy SGB Feb 2029, so it will mature in 2029 and be credited automatically? Will we get market price or price in NSE? - Anonymous
Sovereign gold bonds (SGBs) have a tenure of eight years. One month before maturity, investors are notified of the bond's maturity date. On the date of maturity, the maturity proceeds are credited to the bank account provided by the investor during the application process. The bank account details for repayment will also be mentioned on the SGB certificates. If the bonds were purchased from the secondary market through a trading account and held in dematerialised form, the proceeds would be credited to the bank account linked to the trading account.
If investors hold the bonds to maturity, they are redeemed at the redemption price, which is based on the simple average of the closing price of gold of 999 purity of the previous three business days from the repayment date published by the India Bullion and Jewellers Association Limited. The bonds may trade at a premium or discount on stock exchanges, but at redemption, investors will be paid the market value of the gold denominated by the bonds held by them.
It is important to mention that one of the most convenient ways of investing in gold is through sovereign gold bonds (SGBs), which offer a fixed interest rate of 2.5 per cent per annum. These bonds are tax-efficient and can even be gifted, making them a hassle-free investment option for many.
Suggested read:
Taxation of sovereign gold bonds
Gifting a sovereign gold bond
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