April 19, 2024

How to invest in Sovereign Gold Bonds via Upstox in Five easy steps


Indian government-issued sovereign gold bonds (SGBs) are financial products that make it easy and secure for anyone to invest in gold. These bonds serve as a stand-in for actual gold and are measured in grams. Similar to physical gold, the price of gold affects the value of SGBs. Bonds’ value may improve if the price of gold rises over time, giving investors the chance to realise possible capital gains. In addition to the potential capital appreciation, SGBs also offer annual interest. Interest is paid semi-annually, providing a stable source of income for investors. This interest rate is set by the government and is linked to the prevailing gold price.

These bonds can be traded on stock exchanges for a predetermined period of time, providing investors with liquidity. One can invest in SGBs in denominations of one gram of gold and can purchase multiple bonds. For an individual and a Hindu Undivided Family (HUF), the smallest investment amount is one gram and the maximum is four kilograms in a financial year.

The new tranche of the SGB scheme for financial year 2023-24 will open for subscription from June 19 to June 23, 2023. The allotment day is June 27 and the issue price of the Bond during the subscription period has been fixed at Rs 5,926 per gram. For buyers who apply and make payments online, the government currently provides a discount of Rs 50 per gram of gold and a 2.5% annual interest rate. SBGs have an 8-year maturity duration; investors can withdraw their money after five years from the date of issuance. However, the investor may be able to receive tax advantages by holding the bond until it matures. Tax will be charged for the period the bond was held if the investor sells it before the lock-in period.

Investment platforms like Upstox are offering the option to invest in SGBs through their platform. Upstox is one of India’s largest investment platforms, with over 1 Cr customers. It was established with the goal to make financial investing simple, equitable, and accessible for all Indian investors.

Commenting on the development, Ravi Kumar, Co-Founder & CEO, Upstox saidWe are committed to fostering a culture of diverse financial investing to our users so that they can participate in India’s growth story. In line with this philosophy, we have started offering sovereign gold bonds on the Upstox app and website for the first time. We understand our customers’ needs and are committed to giving them the most user-friendly and investment and trading experience possible.

Here are the 5 simple steps to invest in a SGB via Upstox:

Step 1: Login to your Upstox account by clicking on this link : https://account.upstox.com/actions

Step 2: Go through the details of the SGB before Investing in them and Click on ‘Apply’

Step 3: Select the number of units (It has to be between 1 to 4,000)

Step 4: Select Payment mode and complete the payment

Step 5: Done! Your order has been placed

Next, Upstox will send this order to the exchange on the application closing date and users will get to know about their allotment status on 27th June 2023 (Allotment date). If allotted, the units will be transferred to the customer’s demat account on a specified date.

You Can Apply For SGB on Upstox here: https://account.upstox.com/actions


Authored by Rachit Sabharwal, 

Head of Corporate development, Upstox