Sovereign Gold Bonds
Sovereign Gold Bonds (SGB) are government securities denominated in gold. They offer a unique combination of gold price appreciation plus 2.5% annual interest.
Govt. Backed
Issued by RBI on behalf of Government of India — zero credit risk
2.5% Interest
Earn guaranteed 2.5% annual interest on top of gold price appreciation
Tax-Free Maturity
No capital gains tax if held till 8-year maturity period
No Storage Cost
No storage or insurance charges — it's a paper/electronic instrument
SGB Key Details
Issued By: Reserve Bank of India (RBI) on behalf of Govt. of India
Denomination: Grams of gold (minimum 1 gram)
Tenure: 8 years (exit option from 5th year)
Interest Rate: 2.50% per annum (semi-annual)
Max Investment: 4 kg per individual per fiscal year
Issue Price: Based on simple average of closing price of 999 purity gold
Tradability: Listed on exchanges; transferable
Tax on Maturity: Capital gains are tax-free if held till maturity
SGB vs EKAM Digital Gold
| Feature | SGB | EKAM Digital Gold |
|---|---|---|
| Issuer | RBI / Govt of India | EKAM (SafeGold backed) |
| Min Investment | 1 gram (~₹7,800) | ₹1 |
| Interest/Income | 2.5% p.a. | Gold appreciation only |
| Lock-in Period | 5 years minimum | None |
| Liquidity | Limited (exchange traded) | Instant 24/7 |
| Physical Delivery | Not available | Available |
| Tax on Maturity | Tax-free | 20% LTCG with indexation |
| Availability | Limited windows | Always available |