Can we buy SGB online from secondary market ? A Complete Guide: Read here to know more

About Sovereign Gold Bonds

The Reserve Bank of India (RBI), which issues the Sovereign Gold Bonds (SGB) on behalf of the Government of India, announces the schedule for new tranches of SGBs periodically. While there's a lot of information available here about past issues, premature redemptions, and the performance of various series, a new issuance for the current fiscal year has not been announced. Details of all Past SGB issues are also available in the SGB Dashboard

Is there any new SGB issue for this financial year ?

No, Based on the latest available information, there are no new Sovereign Gold Bond (SGB) series currently open for subscription in the primary market. The last issue was the SGB 2023-24 Series IV, which had its subscription period in February 2024.

Can we Buy / Sell SGB's in the secondary market ?

Yes, you can always buy and sell existing SGBs on the secondary market (NSE and BSE) through your Demat and trading account.

How to Buy Sovereign Gold Bonds from Secondary Markets: A Complete Guide

Yes, you can buy Sovereign Gold Bonds (SGBs) from the secondary market. This is an alternative to the primary issuance windows when the government offers new tranches of the bonds. The secondary market for SGBs is the stock exchange, specifically the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE).

How It Works

SGBs are government securities, and once a new series is issued, it gets listed on the stock exchanges for trading. This allows investors who missed the primary subscription window, or those who want to buy at a potentially discounted price, to purchase the bonds.

The Process to Buy from the Secondary Market

The process is very similar to buying a stock from the stock market. You'll need:

1. A Demat and Trading Account: This is the most crucial requirement. Since SGBs are traded electronically on the stock exchanges, you need a dematerialized (Demat) account to hold the bonds and a trading account to place buy orders. If you don't have one, you'll need to open one with a registered stockbroker (e.g., Zerodha, Angel One, Groww, etc.).
2. Locate the SGBs: You can find the list of SGBs available for trading on the NSE and BSE websites or through your stockbroker's trading platform. The bonds are identified by their unique scrip codes, which usually include the issue year and series (e.g., SGBMAY28).
3. Place a Buy Order:
   • Log in to your trading account.
   • Search for the specific SGB series you want to buy.
   • Place a buy order, just like you would for a stock. You can place a market order or a limit order. It is often recommended to use a limit order to avoid paying an excessively high premium, as the liquidity for some SGBs can be low.
   • The price is determined by the demand and supply in the market. It's important to note that SGBs often trade at a discount to the current spot price of gold in the secondary market due to various factors like low liquidity.
4. Settlement: Once your order is executed, the bonds will be credited to your Demat account within a few working days (typically T+2 day, where T is the day of the transaction).

Key Points to Remember

• Liquidity: The liquidity of SGBs in the secondary market can be low, which means you might not always find a buyer or seller for a specific series, or the bid-ask spread could be wide.
• Price: The price of SGBs in the secondary market is based on supply and demand, and it may be different from the prevailing gold price. It can sometimes be at a discount, making it a good buying opportunity.
• Interest: The 2.50% annual interest on SGBs is paid semi-annually based on the original issue price, not the price at which you bought it from the secondary market.
• Taxation:
  • If you hold the SGB until maturity (8 years), the capital gains are tax-free.
  • However, if you sell the SGB in the secondary market before maturity, any capital gains will be taxed as per the standard short-term or long-term capital gains tax rules, depending on your holding period.

Disclaimer: Above article only publishes details about the product for education purpose and does not solicit or request to invest in any product. Please visit RBI for more details. We advise investors to take opinion from certified/SEBI registered experts before taking any investment decisions.