About Gold Bonds

I recently saw a notification in kite about SGB, i need details about that, i mean they said 2.5% fixed income, if market gold price fell by 10 %in year still i get 2.5% profit i mean no loss, if went up by 10% will get 12.5% profit right, 1 more thing can sell after 1 month after subscription, can any one help me,

The 2.5% interest is on the capital/principal amount (listed price) and not to the change in Gold price.
The interest is paid once every 6 months.

You can learn more about SGB’s here.

You are not protected from losses, 2.5% is interest you earn on Invested Amount.

You can sell anytime once it is listed on the exchanges.

So, ideally if gold price drop by 10% in 1year and i want to redeem, need to book loss of 7.5% right

Net loss of 7.5% considering you hold through both interest payout dates for the year.

Thank u bro

hey one more question can we pledge those bonds in zerodha to get the extra margin?

You can’t pledge SGB’s currently.

Hi @ShubhS9, I have SGB with IL&FS in NSDL account. Is there any method other than Value Free Transfer to Zerodha’s CDSL account ?

Afraid not.

@Bhuvan, I have ‘Client Master Report’ and ‘Holdings Statement’ of SGB from IL&FS dated 2018, would it work for SGB transfer ? (I asked them to courier over it to me in Dec 2018 itself but for some reason couldn’t send it over to Zerodha’s office for Value Free Transfer).