Is Demat Account Required for Sovereign Gold Bond?

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When everyone thinks of investing in the three major trading segments, if one plans to invest in Sovereign Gold Bond, that has to be a bold and intelligent decision. So it makes sense to ask, is Demat Account required for Sovereign Gold Bond investments?

And for those who don’t know what SGB’s are, well, SGBs are government securities that act as substitutes for actual gold. But why SGB when you can just buy physical gold from a nearby jewellery store? Are there any benefits of buying SGB’s?

To answer the above question, consider the following situation where you are going to buy 100gms of gold. And for this, you will have to also pay extra making charges, storage charges and even then there is always a risk of losing this gold biscuit.

Instead, if you just buy Sovereign Gold Bond, all these risks and extra costs get eliminated automatically.

Now that you know the benefits of SGB investments, next, one needs to make clear what the process is for this particular investment. That is the reason that we are discussing the query: Is Demat account required for Sovereign Gold Bond?

Can I Buy Sovereign Gold Bond Without Demat Account?

The answer to this is YES, you can!

But here before moving ahead, let’s look back at the time when the equity shares are being held in the physical form. Recall the drawbacks; they are more prone to fraudulent activities and theft.

Similar could be the case with the Sovereign Gold Bond. Although you can buy and store them without a Demat account but are they safe?

Well it is time to think about the security of your holdings even if you are looking forward to investing in Sovereign Gold Bond without a Demat account then make sure that you fulfil the eligibility criteria like:

One has to be a resident of India.
Must have a PAN Card.

Now, let’s discuss the what are two methods to invest in Sovereign Gold Bonds in India.

How to Buy Sovereign Gold Bond Online?

Every other person and investor these days is more aligned towards technology and when it comes to investment in Sovereign gold bonds, investing online not only saves your money but also provides you with Gold bonds at a cheaper price.

The online application issue the Gold Bonds at ₹50 (per gram) lesser as compared to the offline methodology.

For the online application, just visit the website of the authorized commercial bank and fill the SGB application form.
Enter the PAN details and make a digital payment to apply for it successfully.

Once you get the SGB it gets stored in the RBI books.

Now if you want to provide additional security to your investment, then here it becomes important for you to convert it into dematerialized form, for which you require a demat account.

For opening a demat account, here are a few important parameters to be considered:

Open a Demat account by choosing the stockbroker that provides the provision for investing in Sovereign Gold Bonds.
To open a Demat account and to dematerialize the bond it is important for you to submit a few essential documents like PAN Card, Aadhar Card, Bank Details, etc.
Pay the applicable charges and proceed further by investing in the SGB online.

With these benefits of demat account, you can use the same for sovereign gold bond investments too. Isn’t that wonderful?

How to Buy SGB in Demat Form?

Now if you want to buy it in a Demat form, then you need to follow simple steps as discussed below:

Login to your trading platform provided by the stockbroker.
Next click on the Sovereign Gold Bonds option under the investments menu.
Now enter the exact quantity of SGB’s you have planned to invest in.
Once done with the above step, simply check the net transaction amount and complete the payment procedure.

How to Buy Sovereign Gold Bond Offline?

To invest in Sovereign Gold Bonds offline without a Demat account, it is essential for the investor to download the form from the website. To get the form, click here.

Other than this, you can get the SGB online application form from:

SHCIL Branches
Post Offices
Banks

But no matter where you get this application form, you will have to keep documents like Aadhar card and PAN card handy.

Corresponding to the PAN card as an identification document submitted alongside the SGB application form, the applicant/investor will be assigned a unique ID number.

Those who have already applied for SGBs without a Demat account can always apply for Dematerialization. How so?

Jump to the next section to understand this particular process.

How To Transfer SGB To Demat Account?

Taking care of the paper form of SGBs is easier than handling physical gold. But what’s even more beneficial and feasible is the Demat for SGBs. RBI holds the bonds in its books which can very easily be converted into a Dematerialised form using your existing Demat account.

So if you are wondering is Demat Account required for Sovereign gold bond, then it depends upon the security you want to provide

And if you haven’t yet chosen your Demat account, you can read our comprehensive list of best Demat accounts in India.

Following is the step by step guide for transferring SGB to the Demat account:

STEP 1: Contact your Bank issuer or organization from which you applied for SGBs and ask for a Dematerialization Request Form.
STEP 2: Fill in all the details necessary in the DRF Form. Now before submitting this form, don’t forget to sign it.
STEP 3: Along with the above DRF form, is required that you attach a Client Master Report issued by your broker or DP. And make sure this CMR report has all the necessary details such as account number, date of birth, bank details, etc.
STEP 4: Once the bank or SGB issuer has received your request, they shall upload data in the e-Kuber portal of RBI to initiate the Dematerialisation procedure. And with that, your role in this process ends. Once higher authorities, banks, and DP are done with the formalities, your SGBs will reflect in your Demat account.

Once you have converted these Bonds into a Demat account, you can easily trade-in them using your Trading app or other platforms.

Conclusion

Hopefully, this article has cleared the concept of is demat account required for sovereign gold bond?

So it is entirely up to you whether you want to apply for SGBs through a Demat account or you want to keep it in RBI books only. But, on any given day, SGBs are beneficial over physical gold for the reasons that we have mentioned at the beginning of this article.

But to answer your question: Is Demat Account Required for Sovereign Gold Bond?

The answer is: NO!!

Remember, whatever methodology you use, whether through a bank issuer or a Demat account, you have the option of availing an offline or an online process, choose according to your desirability.

Add extra security to your investment with the Demat account. Get in touch with us and we will assist you in choosing the right stockbroker and in opening a Demat account.