Sovereign Gold Bond vs Physical Gold

Compare Sovereign Gold Bond (SGB) returns vs physical gold investment. Includes 2.5% annual interest, tax-free maturity, making charges, and GST comparison.

Sovereign Gold Bond vs Physical Gold Calculator

8-year comparison: SGB (2.5% interest + tax-free) vs physical gold

Gold quantity 10g

1g500g

grams

Current gold rate Rs 7,200/g

Rs 4KRs 15K

Rs/g

Expected gold appreciation 6% p.a.

2%15%

Holding period 8 years

3 yr20 yr

yrs

Physical gold making charges 12%

0%25%

SGB total return

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maturity + interest

Physical gold return

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after LTCG tax

SGB advantage

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over physical gold

Physical gold cost (incl. GST + making)---

Physical gold sale value---

LTCG tax on physical (12.5%)---

Physical net gain---

SGB cost (no GST, no making)---

SGB maturity (tax-free)---

SGB interest (2.5% p.a., after tax)---

SGB net gain---

SGB net gain vs physical net gain

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Rates and regulations are indicative. Verify current rules with your bank, SEBI, or tax advisor before transacting.

SGB vs physical gold gain over years

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ThriftRupee Insight

SGBs are almost always superior to physical gold for investment purposes. An SGB gives you: (1) the same gold price appreciation, (2) 2.5% annual interest on top (taxable), (3) completely tax-free gains at maturity after 8 years, (4) no storage risk, no making charges, no GST. Physical gold has 3% GST + making charges of 8–15% + storage risk. Unless you need jewellery for wearing, SGB wins on every financial metric.

Frequently asked questions

What is a Sovereign Gold Bond (SGB)?▼

SGBs are government securities denominated in grams of gold, issued by RBI on behalf of the Government of India. They track gold prices and also pay 2.5% annual interest on the nominal value. At maturity (8 years), redemption is at prevailing gold price and is completely exempt from capital gains tax for individuals. SGBs can be traded on stock exchanges before maturity.

Is SGB interest taxable?▼

Yes, the 2.5% annual interest from SGB is taxable under "Income from other sources" at your applicable slab rate. However, the capital gain at maturity (the gold price appreciation component) is completely tax-free for individual investors. If sold on stock exchange before maturity, LTCG rules apply with indexation benefit.

Can I buy SGB now in 2026?▼

RBI issues SGBs in tranches throughout the year. Check RBI and SEBI announcements for the latest SGB series. You can also buy existing SGBs on NSE/BSE at market prices (which may trade at discount or premium to NAV). Demat account is required for exchange-traded SGB purchases.

Sovereign Gold Bond vs Physical Gold