How to buy a Sovereign Gold Bond on the secondary market via Kite

This guide explains how to buy Sovereign Gold Bonds (SGBs) in the exchange-listed secondary market through Zerodha’s Kite platform. SGBs are government securities denominated in units of one gram of gold, issued by the Government of India under the SGB Scheme administered by the Reserve Bank of India (RBI). Once issued, SGBs are listed on the NSE and BSE and can be bought and sold like listed securities.

Buying in the secondary market offers two advantages over a new primary issue: (a) you can buy at any time, not only during the two-to-three-day subscription windows that RBI opens periodically; and (b) secondary market prices often trade at a discount to the prevailing gold price NAV, allowing entry below the RBI’s official issue price.

For information on the SGB scheme design, coupon mechanics, and tax treatment in detail, see SGBs on Zerodha. For early redemption before maturity, see How to redeem an SGB early (5th-year window). For maturity redemption, see How to redeem an SGB at maturity.

Background: SGB series and their listing

The RBI has issued SGB tranches continuously since November 2015 under the Ministry of Finance SGB Scheme notifications. Each tranche carries a unique ISIN, a fixed 2.5% per annum coupon on the issue price (paid semi-annually), and matures 8 years from the date of issue. Investors who hold to maturity and received allotment in the primary issue (or who buy in the secondary market and continue to hold to the 8-year date) receive capital gains tax exemption on the maturity proceeds if the gains arise from holding the SGB to final redemption, a benefit preserved by the Finance Act, 2024.

As of 2026, many older SGB tranches (2016–2018 series) are either already matured or approaching their maturity dates. The secondary market for newer tranches (2020–2024 series) remains active on NSE, though volumes are lower than equity instruments.

Key identifiers for SGB series on Kite:

Step-by-step procedure

Ensure the demat account is active and funds are available

Before placing an order, log in to Zerodha Console and verify that your CDSL demat account is active (not frozen or under any debit freeze).

SGBs are listed on the capital market segment of NSE and BSE (not the debt segment as one might expect). They settle T+1, the same as equity shares.

To add funds:

1. Log in to Kite and click the Funds tab.
2. Click Add funds.
3. Transfer via IMPS or net banking.

The required amount is: number of units × limit price + STT (0.001% on turnover) + brokerage. Unlike bond segment instruments, SGB trades attract a nominal Securities Transaction Tax at 0.001% on the turnover amount, because the SGB is listed in the capital market segment. See Securities Transaction Tax for the charge structure.

Find the SGB series on Kite

Open Kite on web or mobile. Press Ctrl+/ to open the universal search bar.

Search options:

• Type “SGB” to list all SGB series available on Kite.
• Type the series short name such as “SGBMAR29” or “SGBAUG28” to find specific tranches by maturity month and year.
• Type the ISIN if you have located it on the NSE or BSE website.

Kite displays matching instruments labelled with the exchange (NSE or BSE). SGBs appear under the capital market segment (CM), not the debt market (WDM). This is important: if you search in the debt segment only, you may not find SGBs.

Select the SGB series on NSE for better liquidity. Add it to a watchlist using the + icon.

Choosing a series to buy:

When buying in the secondary market, you must consider the remaining years to maturity:

• Newly issued series (5–8 years to maturity): Maximum time to benefit from any gold price appreciation; 2.5% coupon for longer.
• Older series (2–4 years to maturity): Shorter remaining hold; the 5th-year early redemption window may already be available, offering an RBI-priced exit at NAV if needed. See How to redeem an SGB early (5th-year window).
• Very near maturity (under 1 year): Price should converge toward IBJA NAV as maturity approaches; limited time for price appreciation.

Review the price relative to NAV

Click the SGB series in your watchlist to open the detail panel on Kite.

Price analysis:

The live equivalent NAV of an SGB is the IBJA price of 999-purity gold per gram. To check the IBJA rate, visit the IBJA website (ibja.co) or check gold price platforms. As of mid-2026, gold prices are expressed per 10 grams; divide by 10 to get the per-gram equivalent.

Secondary market SGB prices frequently trade at a discount to NAV of 3–10%, because:

1. Secondary market liquidity is thin, depressing prices.
2. Not all investors are aware that SGBs can be bought below NAV.
3. Sellers may be motivated by liquidity needs and price below NAV.

A discount to NAV is advantageous for the buyer: you are effectively buying gold at below the spot market price. However, the discount is also the market’s reflection of the cost of illiquidity; you may face a similar discount if you choose to sell before the RBI’s redemption windows.

Key data points to review before buying:

• LTP versus IBJA NAV: Is the SGB trading at a discount or premium?
• Bid-ask spread: Wide spreads (Rs 50–200 per gram) are common. Use the order book, not LTP, as the basis for your limit price.
• Days since last trade: If the SGB has not traded for several days, the LTP is stale. Post a limit order and wait.
• Maturity date: Confirm the year and month of maturity and the expected early-redemption window dates (3rd, 4th, 5th year of issue based on RBI’s schedule).

Place a limit buy order with CNC product code

Click the Buy button on the SGB series (or press B on the keyboard shortcut on the web interface). The order form opens.

Order form settings:

• Product code: Select CNC for delivery. SGB units are held in your demat account and you intend to hold them.
• Order type: Select Limit without exception. SGB secondary markets are often thin; a market order can execute at a significantly higher price than the last traded price or at any price inside the spread.
• Quantity: Enter the number of units (each unit = 1 gram of gold). The minimum is 1 unit. The maximum is 4 kg per financial year for individuals (including primary issue purchases; secondary market purchases may also count toward the overall limit under RBI guidelines, confirm with RBI’s SGB Scheme notification).
• Price: Set the limit price per unit. A reasonable approach is to set the limit at or slightly below the best offer price in the order book. If the best offer is Rs 7,450 and you are buying for the long term, setting your limit at Rs 7,440 may result in a fill if a seller lowers their offer, which often happens with patient orders.

Review the order summary and click Buy to submit.

Monitor order execution

Navigate to Orders on Kite after submission.

SGB secondary market trades can take hours or even multiple sessions to execute, particularly for older or less liquid series. Strategies to improve execution:

• Set the limit price at the best offer if you want a prompt fill.
• Place a day order at a price slightly below the offer to try for a better price; modify or cancel at end of session if unfilled.
• Monitor across exchanges: SGBs are listed on both NSE and BSE. Check if one exchange has better liquidity for the series you want.

Do not use stop-loss orders or market orders for SGB purchases. The thin order book means these order types can result in poor fills.

Verify demat credit on T+1 and confirm maturity date

On the business day after trade execution (T+1), the SGB units appear in Portfolio → Holdings on Kite and in Console.

Verify:

• ISIN matches the SGB series you bought.
• Units held match the quantity ordered.
• Average purchase price is consistent with the executed price.

After buying, note the following:

• Coupon payments: RBI credits 2.5% per annum on the original issue price to your linked bank account semi-annually. The exact coupon amount per unit is specified in the SGB tranche’s issue document. These payments appear as bank credits, not as Kite or Console portfolio events.
• Maturity date: Note the exact redemption date (8 years from original issue date). Set a reminder. For details on the maturity redemption process, see How to redeem an SGB at maturity.
• 5th-year early redemption window: If the series has crossed its 5th year from original issue, RBI opens redemption windows on coupon dates. For details, see How to redeem an SGB early (5th-year window).

Tax treatment

2.5% coupon income

The semi-annual coupon is taxable as Income from Other Sources at your applicable income tax slab rate. TDS does not apply to SGB coupon payments.

Capital gains on maturity redemption

Redemption at the 8-year maturity date: Capital gains arising from maturity redemption are exempt from capital gains tax under Section 47(viic) of the Income Tax Act as amended. This applies to both primary allottees and secondary market buyers who hold to the full 8-year maturity date from the original issue. The Finance Act, 2024 preserved this exemption, making long-term SGB holding in the secondary market particularly advantageous.

Sale in the secondary market before maturity: If you sell the SGB on Kite before maturity:

• Short-term capital gains (STCG): Holding period less than 36 months; taxed at your income tax slab rate (debt asset STCG treatment).
• Long-term capital gains (LTCG): Holding period 36 months or more but before the 8-year maturity; taxed at 20% with indexation under Section 112. The grandfathering rule for LTCG may apply in specific cases.

5th-year early redemption via RBI: RBI’s early-exit window redemption price is based on the IBJA price; gains from this are treated as capital gains (LTCG at 20% with indexation if held over 36 months from purchase date). The CGT exemption at maturity does not apply to early redemption.

What can go wrong

• Buying at a premium to IBJA NAV. Not all SGB series trade at a discount. Some newer tranches, or those with high upcoming coupon dates, can briefly trade at or above NAV. Check the IBJA rate before placing an order.
• Thin order book resulting in no fill. Many SGB series trade only a few units per day. If you need immediate deployment of funds into gold, consider gold ETFs or gold mutual funds for liquidity. SGBs are best suited to patient investors.
• STT charge not anticipated. Unlike the debt segment (where STT does not apply), SGB purchases on the capital market segment attract STT at 0.001% on turnover. This is small but should be noted.
• Coupon based on issue price, not purchase price. A secondary market buyer buying at Rs 7,400 receives 2.5% coupon on the original issue price (say Rs 5,600 per gram), not on Rs 7,400. This means the effective coupon yield on the secondary market purchase price is lower than 2.5%.
• Maximum holding limit exceeded. RBI’s SGB Scheme caps individual holdings at 4 kg per financial year. Secondary market purchases may count toward this limit. Investors with large holdings should verify compliance with RBI’s SGB Scheme notification.
• Maturity date confusion. SGB maturities are 8 years from the original issue date, not from the secondary market purchase date. Buying a 2018-series SGB in 2025 means maturity in 2026, not 2033.

Related guides

• SGBs on Zerodha, encyclopedic overview of the scheme
• How to redeem an SGB at maturity
• How to redeem an SGB early (5th-year window)
• How to buy a G-Sec on Zerodha Kite
• How to buy a T-Bill on Zerodha
• Reserve Bank of India, issuer and regulator for the SGB Scheme
• Securities Transaction Tax, applicable at 0.001% on SGB turnover
• Grandfathering rule for LTCG, relevant for older SGB series

Conflict of interest disclosure

WebNotes Editorial Team has no financial relationship with Zerodha, RBI, NSE, BSE, or any gold-related entity. This guide is produced for informational purposes only and does not constitute investment advice.

References

1. RBI, Sovereign Gold Bond Scheme 2023-24: Terms and Conditions, Ministry of Finance Notification, rbi.org.in.
2. Finance Act, 2024, Amendment to Section 47(viic) of the Income Tax Act, 1961 (exemption for SGB maturity redemption).
3. Income Tax Act, 1961, Section 112 (LTCG on listed securities), Section 56 (income from other sources).
4. NSE, Sovereign Gold Bond, Capital Market Segment listings, nseindia.com.
5. India Bullion and Jewellers Association (IBJA), Daily gold rate, ibja.co.
6. SEBI Circular, Listing of SGBs on exchanges, SEBI/HO/DDHS/2015.
7. Zerodha Support, “How to buy SGBs on Kite”, support.zerodha.com.
8. RBI, FAQ: Sovereign Gold Bond Scheme, rbi.org.in/faq.