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A Govt. of India Security

Assurance of Safety

Assurance of Purity

Key Features :

  • SGBs are Government securities denomination in grams of gold (1 unit = 1 gram )
  • Issued by the Reserve Bank of India on behalf of the Government of India
  • Investor will earn returns linked to gold price
  • Additionally fixed interest of 2.50% p.a. Payable semi-annually on the issue price
  • Bonds will carry sovereign guarantee both on redemption amount and on the interest
  • Minimum investment: 1gram . Maximum investment: 4000 grams
  • Available in DEMAT & Paper form
  • Tradable on National Stock Exchange of India Limited (NSE)
  • Tenure: 8 years with an exit option from 5th year onwards
  • Issuance through trading members of NSE

COMPARISON OF PHYSICAL GOLD, GOLD ETF AND SOVEREIGN GOLD BOND:

Points Physical Gold Gold ETF Sovereign Gold Bond
Returns Lower than actual return on gold Lower than actual return on gold Higher than actual return on gold
Safety Risk on handling physical gold High High
Purity of Gold Purity of gold always remains a question High as it is in Electronic Form High as it is in Electronic Form
Wealth Tax Wealth tax applicable at 1% on the total valuation of the assets every year Not applicable Not applicable
Capital Gain Long term capital gain tax applicable after 3 years Long term capital gain tax applicable after 3 years Long term capital gain tax applicable after 3 years (No Capital gain tax if held till maturity)
Collateral against Loan Yes No Yes
Tradability/Exit Route Conditional Tradable on Exchange Tradable on Exchange Redemption - 5th year onwards with Gol
Storage cost High Very low Very Low