Can NRIs invest in sovereign gold bonds?

Non-Resident Indians (NRIs) are unable to invest in Sovereign Gold Bonds (SGBs), which are government securities denominated in grams of gold. Only those residing in India, as defined by the Foreign Exchange Management Act, 1999, are eligible to invest in SGBs. This includes individuals, Hindu Undivided Families (HUFs), trusts, universities, and charitable institutions.

NRIs who previously invested in SGBs while they were residents of India can continue to hold onto these investments even after their residential status changes to non-resident. The redemption of SGB proceeds and interest does not get repatriated back to India.

Despite not being able to invest in SGBs, NRIs can still invest in other forms of gold in India. These include physical gold, digital gold, gold mutual funds, and gold ETFs. However, to invest in digital gold or gold ETFs, NRIs need to have a demat account. Physical gold remains a popular choice among NRIs.

The maximum limit for SGB subscription is set at 4kg per individual, 4kg per HUF, and 20kg per trust or similar entities per fiscal year. The bond has an eight-year tenure, and if held till maturity, it will be auto-redeemed, crediting the maturity amount to the investor's registered bank account.

The Sovereign Gold Bond scheme is not currently accepting new subscriptions, but existing bonds held by investors remain valid and will continue to accrue interest until maturity. SGBs can also be purchased from the secondary market. As with any investment, there is a risk of capital loss if the market price of gold declines, though the investor does not lose the units of gold they have paid for.