Non-Resident Indians cannot make fresh investments in Sovereign Gold Bonds under existing rules, as reported by Mint. SGBs are government securities denominated in grams of gold issued by the Reserve Bank of India on behalf of the Government of India, designed as an alternative to holding physical gold. The investment is available only to persons resident in India as defined under the Foreign Exchange Management Act, 1999, with eligible investors including individuals, Hindu Undivided Families (HUFs), trusts, universities and charitable institutions.
An individual who purchased SGBs while being a resident in India can continue to hold those bonds even after changing their residential status from resident to non-resident, according to ICICI Direct. The investment can be held until either early redemption or maturity, with the SGB scheme having a tenure of eight years. If the investor holds the bond until maturity, it is automatically redeemed and the maturity proceeds are credited to the registered bank account. However, redemption proceeds and interest from such investments are not repatriated to India.
NRIs, Persons of Indian Origin (PIOs) and Overseas Citizens of India (OCIs) can invest in gold through various avenues including physical gold, e-gold, gold mutual funds and Gold ETFs, as reported by Mint. These investments require a demat account for e-gold, gold mutual funds or Gold ETFs. Physical gold remains available for investors who prefer to hold the metal directly, while gold mutual funds invest primarily in gold and Gold ETFs are exchange-traded funds whose underlying asset is gold. The daily gold rate you see online is just a benchmark, with final showroom prices always higher due to additional costs including making charges and storage fees.
For eligible SGB investors, the maximum subscription limit is 4 kg per individual in a financial year, with the same limit for HUFs, while trusts and similar entities can subscribe to up to 20 kg in a financial year, according to Mint. The financial year runs from April to March. The SGB scheme is no longer open for new subscriptions, but existing SGBs remain valid and will continue to earn interest and mature according to their original terms. Investors can also buy existing SGBs through the secondary market.
