Mutual Funds
Professionally managed, diversified portfolios across equity, debt and hybrid categories, matched to your goals, risk tolerance and time horizon.
Sovereign Gold Bonds
Government-issued bonds linked to the price of gold that also pay a fixed annual interest — a way to hold gold without storing it.
- Risk level
- Moderate risk
- Minimum investment
- 1 gram of gold (one unit)
What are Sovereign Gold Bonds?
Sovereign Gold Bonds (SGBs) are government securities denominated in grams of gold. They are issued by the Reserve Bank of India on behalf of the Government of India. Instead of buying physical gold, you hold a bond whose value tracks the price of gold, and you also earn interest.
Key features
- Interest: 2.5% a year on the issue price, paid half-yearly to your bank account.
- Tenure: eight years, with an option to redeem early with the RBI from the fifth year.
- Redemption price: based on the average price of gold of 999 purity, as published, in the days before redemption.
- Form: held in your demat account or as a certificate of holding.
- Trading: listed on the NSE and BSE.
Availability
New SGB tranches have not been issued for some time. If you want to invest today, you would buy existing bonds on the stock exchange. Prices there can be above or below the value of the underlying gold, and trading volumes are often low, so it may take time to buy or sell the quantity you want.
Other ways to hold gold in financial form include gold ETFs and gold mutual funds, which we can also help you with.
Things to keep in mind
The value of your investment rises and falls with the price of gold, and you can lose capital if gold prices fall. The interest is the only fixed component.
How GTDIS helps
We explain the options for investing in gold, help you compare bonds available on the exchange, and assist with the transaction and paperwork.
Sovereign Gold Bonds: common questions
Can I still buy Sovereign Gold Bonds?
The Government has not announced new issues recently. Existing bonds can be bought and sold on the stock exchanges through a demat account, subject to availability and price. Contact us for the current position.
What happens at maturity?
The bonds mature after eight years and are redeemed in rupees at a price based on the prevailing price of gold. Early redemption with the RBI is possible from the fifth year, on interest payment dates.
How are Sovereign Gold Bonds taxed?
Interest is taxable at your slab rate. The tax treatment of gains depends on how you bought the bond and how you exit. The rules have changed over time, so please confirm the current position with your tax adviser.
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Want to know more about Sovereign Gold Bonds?
Talk to us. We'll explain how it works, what the risks are and how to get started.