What are Sovereign Gold Bonds (Gold ETF)?
Understand Sovereign Gold Bonds, how they offer 2.5% extra interest over physical gold, and their tax benefits.
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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 (RBI) on behalf of the Government of India. They offer a superior alternative to holding physical gold.
Why SGBs are Better Than Physical Gold
- Extra Interest: You earn a fixed 2.5% annual interest on the initial investment amount, paid semi-annually, on top of the capital appreciation of gold. Physical gold pays no interest.
- Zero Making Charges: You don't pay the 10-15% making charges associated with gold jewelry.
- Tax-Free Capital Gains: If you hold the bond until maturity (8 years), the capital gains tax on the gold appreciation is completely exempt.
Use the calculator above to compare the incredible ROI difference between buying physical gold vs investing in SGBs.