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Calculate dual benefits: Capital appreciation of gold plus the government's guaranteed 2.5% annual interest.
Max limit: 4000g (4kg) per individual
Total Returns (Interest + Gold Price)
₹60,000
₹12,000
(₹1,500 / year)
₹88,647
@ 5% CAGR
Tax Exemption: Unlike physical gold or gold ETFs, if you hold the SGB until maturity (8 years), the capital gains made on the gold price appreciation are 100% Tax Free!
SGBs are government securities denominated in grams of gold. They are substitutes for holding physical gold. Investors pay the issue price in cash, and the bonds are redeemed in cash on maturity.
The government pays a guaranteed fixed interest of 2.50% per annum on the nominal value (issue price). This interest is credited semi-annually to the investor's bank account.
No. The 2.5% interest received every year is completely taxable as per your applicable income tax slab.
Yes! If you hold the SGB until its final maturity (8 years), the capital gains arising on redemption are completely exempt from tax.
SGBs have an 8-year tenure, but premature redemption is allowed from the 5th year onwards. Alternatively, if held in Demat form, they can be sold on the stock exchange at any time (though liquidity may be low).