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What is sovereign gold bond ( SGB)?

These are bonds Issued by RBI on behalf of Government of India, Sovereign Gold Bonds ( SGB ) are investment instrument where in investors can safely buy in digital form. Investment in Gold Bond is a substitute for investment in physical gold. By investing in Sovereign gold bonds investors are subject to same growth and fall of physical gold price.

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Details & Features of sovereign gold bond (SGB)

  • Opportunity to earn assured return of 2.50% Per annum payable half yearly on the issue price. (Source: NSE)
  • Available in Demat and physical form.
  • Minimum investment limit of 1 gram and maximum limit of 4kg for individuals
    • Maximum limit for Hindu Undivided Family(HUF): 4 Kg.
    • Trusts and similar entities : 20 Kg.
    • Above limits are subject to change as per notification from Government through RBI
  • Bonds will be tradable on exchange after fortnight.
  • Redemption price will be in Indian Rupees based on simple average of closing price of gold of 999 purity of previous 3 working days published by Indian Bullion and Jewellers Association Ltd.
  • Bond carries maturity tenure period of 8 years with exit option in 5th year.

Benefits of investing in (SGB)

  • Opportunity to earn assured return of 2.50% Per annum (Source: NSE)
  • Easily can be invested via online mode. Get Rs. 50 discount when purchase in digital mode
  • Exemption on capital gain tax on completion of maturity
  • Can be used as collateral for loans
  • No storage cost and one of the safest ways to invest in gold
Comparison of Physical gold, Gold ETF and Sovereign Gold Bond View

Upcoming issues

Sr. No Tranche Date of Subscription Date of Issuance
1 2019-20 Series VII January 13 to January 17, 2020 21-Jan-20
2 2019-20 Series IX February 03 to February 07, 2020 11-Feb-20
3 2019-20 Series X March 02 to March 06, 2020 11-Mar-20
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*The Government of India may, with prior notice close the Scheme before the specified period.

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Fees and other financial terms and conditions for investing in stock baskets:

  • The client agrees to pay the fees calculated in the manner and on the rates as provided in the Schedule I.
  • The Basket profits or returns would include any dividends, benefits received out of corporate actions.
  • All the costs, fees, charges as per schedule I and expenses of whatsoever nature incurred by us in connection with the acquisition, holding, sale and transfer, in respect of the dematerialized state charges of the Depository Participant, in respect of Securities shall be paid by the Client.
  • A new separate DP account is required for all investors for the basket investments.
  • For new and existing clients, the Demat account will be used only for equity basket and Investor is free to open separate Demat account for self managed investment.
  • During the course of investment, we will invest as close as possible to the basket amount. Some small surplus to be left due to rounding off that amount will be managed /invest/return to the investor as suitable.
  • The stocks in the basket will be as per the discretion of the ACMIIL. These stocks would be reviewed from time to time and the rebalancing, (if any), of the stocks in the basket would be at the discretion of ACMIIL.
  • You are free to exit basket wise or exit from all basket at any point of time. You are not allowed to selectively exit from any stock or add any stock to the basket.
  • In case of a bank mandate, we will need 20% more mandate of the basket amount as the stock price will fluctuate time to time. The amount taken from bank would be actual value of Basket.
  • The Client agrees that in the event of a dispute, the Claims, if any, by the Client cannot exceed the fees paid by the Client for the year for advisory services in Rupee terms.
  • The client agrees that in case of any dispute, the claim and/or disputes will be referred to arbitration as per the Rules, Bye-laws and Regulations of the Stock Exchange where the trade is executed and the circulars/notices issued there under as may be in force from time to time.
  • As a SEBI registered stock broker, we are permitted to act as an adviser. This product is part of our advisory activity.
  • As a SEBI registered stock broker, we are permitted to act as an adviser. This product is part of our advisory activity.

Schedule I

Fees Structure
Nature of FeesFees
Basket FeesINR 300 per basket + GST (Charged upfront)
Advisory Fees (Second year onwards)2% p.a+ GST (Charged upfront on Basket Value)
Approx Transaction Charges0.13%
Note: In Basket fees and Management Fees, GST will be recovered at the applicable rate.
Transaction charges includes Brokerage, STT, Stock Exchange charges, Stamp duty, SEBI Charges & GST

Fees Structure Example:

Suppose Client A has bought 1 basket for 36 months so he will pay INR 300 per basket as Basket fees for 36 months and from 13th month onwards he will pay Advisory fees for 1st basket as one year ends for the basket. So, after completion of one year the client A has to pay the Basket fees (13th month fresh basket) as well advisory fees (1st basket upfront Advisory fees for second year).

Transaction Charges Includes
HeadsRate
STT (Central Govt)0.1% on Transaction Value
Transaction Charges (Stock Exchange)0.0034% on Transaction Value
Stamp Duty & SEBI Charges0.011% on Transaction Value
GST18% on Transaction Charges.
  • I have understood that Investment in securities market is subject to market risk, read all the related documents carefully before investing. Past performance is not indicative of future performance and future results. The recommendations made by ACMIIL could be those that are based on its own research or on the advice of a SEBI registered Investment Adviser.
  • I have understood the equity basket fees terms and other financial conditions and the clarifications required by me. I understand that the investment in Equity basket is subject to risk associated with equity investments. I have understood the investment process and other aspects of the product.
  • I hereby agree to participate.

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