SGB Returns Calculator
Project your Sovereign Gold Bond returns over 8 years — 2.5% annual interest + gold price appreciation, capital gains tax-free at maturity. Includes ₹50/gram online discount.
Details
Result
Total Return at Maturity
₹1,53,720
Investment
₹74,500
Online Discount Saved
₹500
Total Interest (2.5% p.a.)
₹14,900
Capital Appreciation
₹64,320
Effective CAGR
9.48% p.a.
For estimation only. Not professional financial, tax, or legal advice. Consult a qualified advisor before making decisions. Full disclaimer.
What Sovereign Gold Bonds (SGB) actually are
SGBs are RBI-issued bonds denominated in grams of gold. You buy in grams, you earn 2.5% per year fixed interest (paid every 6 months), and at maturity (8 years), you get back the current gold price × your grams. They're sold in tranches a few times a year through banks, post offices, and stockbrokers (NSE/BSE).
Why SGBs beat physical gold
- 2.5% extra return per year — physical gold pays nothing.
- No making charges, no storage cost — you don't hold metal.
- Capital gains tax-free at maturity — held 8 years, the gold price appreciation is not taxed.
- ₹50/gram online discount — applies for online subscription via netbanking.
- Loan collateral — banks accept SGBs at up to 70-80% LTV.
The catches
- Liquidity is limited. Tradable on NSE/BSE but volume is thin — exit prices can be 5-8% below NAV.
- Lock-in 5 years. Premature exit only on interest payment dates after year 5. Before that, only via secondary market.
- Interest is taxable — the 2.5% is added to your income at slab rate.
- If sold before maturity via exchange, gains taxed: STCG at slab if held < 12 months, LTCG 12.5% if held longer.
- Government has paused new tranches in 2024. Only secondary market trading right now. Watch for resumption.
SGB vs Gold ETF vs Digital Gold vs Physical Gold
- SGB: 2.5% interest + tax-free maturity + ₹50/gm discount. Best for > 5 year holds.
- Gold ETF: Highly liquid, low expense (0.5-1%), no interest, capital gains taxable. Best for trading.
- Digital gold (PhonePe, Paytm, MMTC): Easy to buy, lower minimums, but storage cost ~0.5-1% per year, no interest.
- Physical gold: Cultural value but 5-15% making charges, storage hassle, no interest, GST 3% on purchase.
How to buy SGB
- Wait for an open tranche announcement (RBI press release).
- Apply via netbanking (most banks have an SGB tab) for the ₹50/gm discount.
- Or buy from secondary market on NSE/BSE through your demat account any time.
- Bonds get credited to your demat account; interest is auto-credited to your bank.
Tip: stagger your purchases
SGB tranches come out at different gold prices. If you're building a position over the next 8 years, buy a bit at each tranche rather than going all-in at one price. Compare with SIP-style investing in gold ETFs for diversification.