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The Sovereign Gold Bond Scheme is offered by the Indian government to allow the investors to receive investment returns that are linked to the price of gold. YES bank has launched the Gold Sovereign Bond from major branches across the country and is in the process of fine-tuning its launch of the Gold Monetization Scheme. YES bank through its YES Institute had floated multiple concepts and implementation papers on the Gold Monetization Schemes to build an industry level consensus thereby augment the Government’s stellar efforts

As an alternative to investing in gold, YES Bank, one of the leading banks of India, offers the facility to invest in a special scheme known as Sovereign Gold Bonds or SGBs, which are essentially government securities that are designated in grams of gold.

Sovereign gold bonds are issued every month from October 2019 to March 2020. Under this scheme, the issues are offered in tranches by the Reserve Bank of India in consultation with the Government of India.

Features and Benefits of YES Bank Sovereign Gold Bonds

Yes Bank Gold Deposit Scheme

Some of the key features and benefits of sovereign gold bonds offered by YES bank are as follows:

  • Sovereign gold bonds are issued in multiple weight denominations, starting from 1 gram onwards, providing flexibility in terms of purchasing gold which suits the needs of an individual investor.
  • An investor has the option to hold these bonds either in paper or Demat form, whichever is convenient to an individual.
  • Investments in this scheme are eligible to earn interest every year.
  • There is no need for storage or safety of gold under this scheme, as the gold isn’t physically given to an investor immediately.
  • Investments in this scheme are flexible, with one having an option to choose the amount he/she wishes to invest.
  • Investors can use these bonds as collateral against loans.
  • Since it is backed by the government, one is assured of the purity of gold when they invest in the scheme.
  • This scheme carries a maturity period of 8 years.
  • Investors can choose to gift or transfer these bonds to others, provided they meet the necessary eligibility criteria.
  • Premature encashment of these bonds is allowed after 5 years of issue.
  • The application process is simple and fast, with banks and post offices permitted to provide this service.
  • Investors can opt to purchase these bonds through multiple payment modes, with cheques, cash, DDs or electronic transfer accepted.
  • This scheme has a provision for nomination, adhering to the rules of the land.
  • Investors can trade these bonds on stock exchanges, subject to notifications of the Reserve Bank of India.

Interest Rates

The government has fixed an interest rate on Sovereign gold bonds scheme, with all investors eligible to earn interest on their investment. The current interest rate stands at 2.75% per annum, with this interest paid every six months. This interest rate can be changed by the government as per its policies.

Eligibility Criteria

Sovereign Gold Bonds can be obtained by an Indian resident (as defined under the Foreign Exchange Management Act, 1999). Individuals, universities, Hindu Undivided Families (HUFs), Charitable Institutions, Trusts are among the eligible bodies who can apply for a Sovereign Gold Bond Scheme. Additionally, minors who are interested to invest in this scheme may do so by asking the guardian to submit an application on their behalf.

Why Invest in Sovereign Gold Bonds?

  • The quantity of gold for which the investor pays is protected as far as Sovereign gold bond schemes. The investor receives the ongoing market price at the time of redemption of such bonds.
  • Issues such as making charges and purity in the case of gold in jewellery form can be avoided by investing in Sovereign gold bonds.
  • The bonds are issued by the Reserve Bank of India on behalf of the government.
  • SGB is a good alternative for gold in physical form.
  • These are distributed through YES bank among many other banks and designated post offices.

Documents Required

Here is the list of documents that are required to be furnished by investors as proof of identity while applying for a YES bank sovereign gold bond. Original as well as the photocopy of documents have to be presented at the time of application.

  • Aadhaar
  • PAN
  • Passport
  • Voter ID, and
  • TAN


1.At what price are the bonds sold?

The nominal value of Gold Bonds shall be in Indian Rupees fixed on the basis of simple average of the closing price of gold of 999 purity, published by the India Bullion and Jewellers Association Limited, for the last 3 business days of the week preceding the subscription period.

2.How can I exit my investment in SGB?

For premature withdrawal investors can file a request before 30 days of coupon date to requisite: The time period can further be reduced on request but shall in no case be lesser than one day before the coupon date. On successful processing of the application, payment would be a credit to the registered bank account of the investor.

  • Banks
  • Post Offices
  • Agent etc

3.Can I encash the bond anytime I want? Is premature redemption allowed?

Though the tenor of the bond is 8 years, early encashment/redemption of the bond is allowed after the fifth year from the date of issue on coupon payment dates. The bond will be tradable on Exchanges if held in Demat form. It can also be transferred to any other eligible investor.

4.Can I take a loan against Sovereign Gold Bonds?

Yes, you can take a loan by using these bonds as securities. These bonds can be used as collaterals at banks, financial institutions and other non-banking financial companies.

5.Who will provide other customer services to the investors after issuance of the bonds?

The issuing banks/SHCIL offices/Post Offices/Designated stock exchanges/agents through which these securities have been purchased will provide other customer services such as change of address, early redemption, nomination, grievance redressal, transfer applications etc.

6.Can I apply online?

Yes. A customer can apply online through the website of the listed scheduled commercial banks.

End Note

Sovereign Gold Bonds are Government securities denominated in multiples of gram(s) of gold. They are a substitute for investment in physical gold. To buy the bond, the investor has to pay the issue price in cash to an authorised SEBI Broker. On redemption, cash is deposited into the investor's registered bank account. These Bonds are issued by the Reserve Bank of India on behalf of the Government of India and are traded on the stock exchange

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