What are Sovereign Gold Bonds (SGBs) and who is eligible to invest?
Sovereign Gold Bonds (SGBs) are government-issued debt securities that allow investors to gain exposure to gold without holding it in physical form. These bonds are denominated in grams of gold and provide dual benefits—capital appreciation linked to gold prices and a fixed annual interest payout. The scheme is backed by the Government of India and managed by the Reserve Bank of India (RBI).
Key features of SGBs
- Issuer: Government of India through the Reserve Bank of India (RBI)
- Denomination: In grams of gold
- Tenure: 8 years (with early exit allowed after 5 years)
- Interest: 2.5% per annum (paid semi-annually)
- Redemption: Cash settlement at market value on maturity
- Risk level: Virtually no credit risk, as they are sovereign-backed
SGBs eliminate the risks and costs associated with storing physical gold. They provide returns that match gold market prices along with fixed interest income.
Who is eligible to invest?
- Individuals:
Resident Indian individuals are eligible to invest. Non-resident Indians (NRIs) cannot make fresh subscriptions but can continue to hold existing bonds until maturity (on a non-repatriation basis). - Hindu Undivided Families (HUFs):
HUFs can invest under the name of the Karta, who acts as the family representative. - Trusts, Universities, and Charitable Institutions:
Eligible to invest as long as they comply with RBI guidelines.
Important: To invest in SGBs via FYERS, you must have an active Demat account. Also, Non-Resident Indians (NRIs) are not allowed to make fresh investments in SGBs as per RBI rules. They can only hold existing bonds until maturity.
What if...
| Scenario | Resolution |
|---|
| You need liquidity before 5 years | You can sell your SGBs in the secondary market via FYERS. For the process, refer to this article. |
| You want physical gold instead | SGBs cannot be redeemed in physical form. Consider gold ETFs or direct gold purchase. |
| You don’t have a Demat account | It is mandatory. You’ll need to open one with FYERS (through this link ) or with any SEBI-registered depository participant to proceed. |
| You're an NRI wishing to invest anew | New investments are not permitted for NRIs. You can only hold existing bonds until maturity. |
Last updated: 24 Sep 2025
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