NSE EGR Gold: How You Can Convert Electronic Gold Receipts To Physical Gold? How Trading Works & Rules?

The National Stock Exchange's electronic gold receipts (EGR) segment is a unique gold investment option. EGRs bring timely and modern ways to invest in gold. One of the key benefits that sets EGR apart is the option to convert your electronic gold into physical gold. Let's know all about NSE's EGR gold.

What is NSE's EGR Gold?

EGRs are launched by NSE in May month, which are typically exchange-traded securities. These are linked with standardized gold, enabling ,based price discovery, electronic holding, and the flexibility to buy and sell in defined denominations and purity, with the option to convert to/from physical gold as per the prescribed process.

As per NSE, with the blend of standardization, accessibility, and a regulated ecosystem, EGRs are positioned to become a key channel for gold participation in the years ahead.

Some of the key benefits of EGRs are the following:

Unified pricing: one nation, one price
Easily tradable on exchange
More convenient than physical gold
Provides liquidity and assured gold quality
Fungibility of the gold delivery
Settlement guarantee for investors
Helps diversify investment portfolio
Held in demat account like stocks
Flexible trading in various gold denominations

Salient Features of Electronic Gold Receipts (EGRS)

1. They are regulated by market watchdog SEBI and traded on NSE.

2. The timings for trading in EGR is from 9:00 AM to 11:30 PM from Monday to Friday. The overall closing hours for EGR are 11:55 PM after settlement.

3. The settlement period is T+1. Hence, EGRs purchased are transferred to investors' Demat accounts on the next working day. Also, sellers receive their cash on the next day.

4. The gold available for trading in EGR is of 999 purity and 995 purity. These are:

Under both 999 purity and 995 purity:

• GLD1KG99 and GLD1KG95 are 1Kg gold;
• GOLD100G99 and GOLD100G95 are 100 grams gold;
• GOLD10G99 and GOLD10G95 are 10 grams gold;
• GOLD1G99 and GOLD1G95 are 1 gram gold; and
• GLD100MG99 and GLD100MG95 are 100 milligram gold.

5. Furthermore, for buying and holding EGRs, you will be required to pay brokerage fees if they are bought from a stockbroker. There are also depository charges for having EGRs in your portfolio. Additional charges include storage charges to vault managers. Lastly, purity testing and transportation charges are applied when converting EGRs to physical gold jewelry.

How To Convert EGRs To Physical Gold?

As per Zerodha's explainer, you can do the following steps:

Step 1: You can convert your EGRs to physical gold at any time by placing a withdrawal request through your depository. The request is valid for 3 days. Your depository forwards the request to the vault manager, who arranges delivery of the gold. Your EGRs are extinguished once the gold is delivered to you.

Step 2: If you want to verify purity before taking delivery, you can request purity testing at the vault before the gold leaves the premises. Purity testing, transportation, and any related charges are borne by you and will be disclosed upfront by the vault manager.

Step 3: You are free to arrange your own transportation from the vault to your location. Vault managers may also list logistics service providers on their website for your reference.

Hence, EGRs offer investors transparency in pricing, safe holding and the ability to start small.