Sovereign Gold Bond
Calculate dual benefits: Capital appreciation of gold plus the government's guaranteed 2.5% annual interest.
Bond Details
Max limit: 4000g (4kg) per individual
Total Returns (Interest + Gold Price)
₹1,00,647
Initial Invest
₹60,000
Total Interest @ 2.5%
₹12,000
(₹1,500 / year)
Maturity Gold Val
₹88,647
@ 5% CAGR
Overall Yield Breakdown
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!
Frequently Asked Questions
What is a Sovereign Gold Bond (SGB)?
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.
What is the guaranteed interest rate?
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.
Is the interest earned tax-free?
No. The 2.5% interest received every year is completely taxable as per your applicable income tax slab.
Are the capital gains on maturity tax-free?
Yes! If you hold the SGB until its final maturity (8 years), the capital gains arising on redemption are completely exempt from tax.
Can I sell the bonds before 8 years?
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).