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Introduction

Axis Bank is one of the authorized banks to issue Sovereign Gold Bonds. These bonds are government securities that are denominated in gold grams and are issued by the Reserve Bank of India on behalf of the Government of India. Such sovereign bonds can be easily bought through exchanges at the time of new issuance or through secondary markets.

Axis bank has currently suspended/closed the subscription for the gold bonds till RBI issues a notification for fresh tranche of Series X of Sovereign Gold Bond 2019-20.

The summary details of the scheme, though, are mentioned here.

Features and Benefits of the Scheme

Axis Bank Gold Deposit Scheme
  • The idea to come out with such scheme was to give the investors a viable option to the conventional ways of investing in gold, hence, the investment reduces the risk as well as costs involved in storage of gold in physical form and also eliminating the ancillary costs like making charges, purity testing charges, etc.
  • The investors are, moreover, assured of the value of their investment in terms of the prevailing market value of gold at the time of maturity/redemption apart from earning regular interest on their investment.
  • The scheme offers gold bonds to individuals (whether held in personal capacity or on behalf of a minor or jointly), HUFs, Trusts and similar entities as notified by the RBI from time to time.
  • The minimum investment in the scheme is 1 gram of gold and the maximum limit varies for each class of eligible applicants (4kg for individuals and HUFs, 20 Kg for others).
  • The tenure of the bonds is 8 years with a minimum lock in period of 5 years after which the investors are allowed to pre-redeem or partly redeem the bonds, payment of which shall be received by them on the following interest payment date.
  • The redemption value of the bonds is equivalent to the prevailing market price at such time.
  • Investors have the option to transfer, trade or file a nomination under this scheme.
  • The bonds, however, can only be traded if they are held in the demat form and not in the physical form.
  • Investors also have the facility to use these bonds as collateral for seeking loans from any banks or any financial institutions.

Interest payment of the Scheme

Rate of interest for the bonds is 2.5% per annum and is fixed in nature with a half yearly payment schedule.

Such interest is taxable under the Income Tax Act, 1961 in the hands of the investor.

The scheme provides for the payment of the final interest along with the principal amount at the time of maturity/redemption of these bonds.

Eligibility for the Scheme

The eligible applicants that can invest in these bonds are all the resident Indians. This includes

  • Individuals,
  • Joint accounts,
  • Minor accounts,
  • HUF,
  • Universities
  • Trusts,

Documents required for the Scheme

The list of documents required for this scheme are in accordance with the basic KYC norms of any bank/deposit schemes as laid down by RBI. Apart from those, the investors are required to adhere to the following,

  • Duly filled application form that can be submitted at the branches during normal working hours on the week of subscription.
  • The bonds can be subscribed by applying in prescribed ‘FORM A’ or any other similar form and mention the details like the quantity of the gold in grams, name and address of the applicant as well as the PAN Number of the investor issued by the Income Tax Department compulsorily.
  • The application has to be completed in order to be accepted as partial/incomplete applications are rejected.
  • The applicants will receive an acknowledgement receipt in the prescribed FORM B.
  • The investors will be provided with a Certificate of Holding via email id if provided by them. The investors can also collect eh same from post office or through the issuing bank or via email from RBI directly.

Apart from the Sovereign Gold Bond Scheme, Axis Bank also has the Gold Scheme where the customers can buy Gold or Silver Mohurs directly from any of the branches of the bank across the country. The other Gold Scheme of the bank allows the customers to seek loans ranging from Rs. 25,000 to Rs. 20,00,000 against their gold ornaments. The details of both the schemes of the bank are provided here.

Gold and silver Mohur

Features and benefits of Gold and Silver Mohurs

  • The investment in Gold or Silver Mohurs of the bank is a steady and assured investment, easily available and can be foreclosed or partly paid at no extra costs to the investor.
  • Applicants have to be an existing customer of the bank to be part of this scheme.
  • The gold and silver Mohurs are available in 24 karat and 99.99% purity across all the branches of the bank and are imported from Switzerland.
  • They are available in tamper proof packages that are specially designed for such Mohurs and have no additional maintenance costs.
  • The rate of gold or silver Mohurs is not fixed and is determined by the daily market rates.
  • These Mohurs are in the form of liquid assets and can be easily traded as and when required.
  • Gold Mohurs are available in various denominations like 2 grams, 5 grams, 8 grams, 10 grams, 20 grams, 50 grams and 100 grams with the embossed image of Goddess Laxmi on the 5 gram Mohur and a design of Banyan tree on the Silver Mohurs.
  • Axis bank cannot buy back these Mohurs as it is against the guidelines of RBI where the banks are not permitted to buyback silver or gold.
  • For the purchase of these Mohurs with value of Rs. 50,000 or more, applicants have to mandatorily furnish their PAN card details.

Axis bank Loan against Gold

Customers can avail loans against their gold ornaments by pledging them with the bank and earn loyalty points as well at up on sanctioning of the same.

The features of these loans are mentioned below.

  • The tenure of these loans is a minimum of 6 months and a maximum of 36 months (3 years).
  • The applicants can get a prompt disbursal of the loan provided their application is complete and the documents required are duly submitted.
  • The other benefit of these loans is that the gold of the applicant is held safely in the vaults of the bank.
  • The bank permits pre payment or part payment of the loan at no extra charges and the part payment of the loan can be at a minimum of Rs. 10,000 and up to 3 payments only.
  • The repayment mode of these loans is flexible where the borrower is allowed to either pay the interest upfront and the principal at the maturity date or pay interest in easy affordable EMIs and principal at maturity date.
  • The rate of interest for such loans ranges from 9.80% to 17% and has a provision for penal interest at 2% on overdue amounts.
  • The minimum age for applying these loans is 18 years and maximum is 75 years. Also, the bank does not require a co-applicant for such loans.
  • The applicants will be required to submit a duly filled and signed application form along with the KYC documents and any post disbursement documents if required by the bank.

FAQs

1. How can a person apply for the gold loan?

Customers can apply for the gold loan by sending an SMS ‘IGL” to 5676782 or by applying the same online at the bank’s website.

2. Does the bank have any foreclosure charges for the gold loan?

the Bank does not charge any foreclosure charges for the gold loans.

3. Can any person purchase the gold or silver mohurs offered by the bank?

The applicant has to be an existing customer of the bank to be eligible for purchase of the gold and silver mohurs offered by the bank.

4. Is the interest on Sovereign Gold Bonds received in gold?

No. Investors will receive the interest on the Sovereign Gold Bonds in the form of INR only and not in the form of gold.

5. What is the tenure of the Sovereign Gold Bonds?

the tenure of the bonds is 8 years with a minimum lock in period of % years after which the customers are eligible for part/pre-redemption of the bonds.

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