Can NRIs invest in sovereign gold bonds? What the latest SGB investment rules say

Though Non-Resident Indians (NRIs) can invest in several forms of gold in India, such as physical gold and gold mutual funds, they cannot invest in Sovereign Gold Bonds (SGBs). However, NRIs who bought SGBs while they were residents in India can continue to hold them after their residential status changes. Here is what the latest SGB investment rules say about NRI investment.

Are Non-Resident Indians (NRIs) eligible to invest in Sovereign Gold Bonds?

No, NRIs are not eligible to invest in SGBs. Only persons resident in India as defined under the Foreign Exchange Management Act, 1999, are eligible to invest in SGBs.

Eligible SGB investors include individuals, HUFs, trusts, universities and charitable institutions.

As per RBI instructions, “Every application must be accompanied by the ‘PAN Number’ issued by the Income Tax Department to the investor(s) as the PAN number of the first/ sole applicant is mandatory.

Also read: Gold bond premature redemption calendar for October 2026-March 2027 released: Check all SGB exit dates to redeem your investments

Can NRIs continue to hold SGB investments after the change in the residential status?

Individual investors with subsequent change in their residential status from resident to non-resident can continue to hold SGB investments till early redemption/maturity.

As per the ICICI Direct website, “The redemption proceeds and interest from the investment does not get repatriated to India.”

Can NRIs invest in other forms of gold?

As an NRI/Person of Indian Origin (PIO)/Overseas Citizen of India (OCI), you can invest in gold in India. The avenues include:

Physical gold: Physical gold continues to hold strong relevance for NRIs.

Digital gold include

• E-gold: They are gold units that are listed and can be traded on a stock exchange.
• Gold mutual funds: These are mutual funds that have gold as their primary commodity.
• Gold ETFs: Gold ETFs are Exchange Traded Funds that have gold as their underlying asset.

The ETF returns and associated risk is a replication of gold’s ongoing value in the market.

To invest in digital gold be it E-gold, gold mutual funds or gold ETFs, NRIs need a demat account to do so.

SGB investment details

The maximum limit of SGB subscription is 4kg for individuals, 4kg for HUF and 20kg for trusts and similar entities per fiscal year (April-March) notified by the government from time to time. SGB has a tenure of eight years. If a customer holds the bond till maturity, it will be auto redeemed, and the maturity amount will be credited to their registered bank account.

Are there any new upcoming Sovereign Gold Bonds?

The Sovereign Gold Bond scheme is no longer open for new subscriptions. However, existing bonds held by investors remain valid and will continue to accrue interest and mature as per the original terms. SGBs can also be bought from the secondary market.

What is a Sovereign Gold Bond (SGB)? Who is the issuer?

SGBs are government securities denominated in grams of gold. They are substitutes for holding physical gold. Investors have to pay the issue price in cash and the bonds will be redeemed in cash on maturity. The Bond is issued by the Reserve Bank on behalf of the Government of India.

Are there any risks in investing in SGBs?

There may be a risk of capital loss if the market price of gold declines. However, the investor does not lose in terms of the units of gold which he has paid for.