SGB Analyzer

Detailed Comparison

SGB vs PPF: Long-Term Investment Comparison (2026)

Two tax-free instruments - which wins?

Both SGB and PPF are long-term, tax-efficient investments backed by the government. But they serve different purposes in your portfolio. PPF offers guaranteed returns with triple tax exemption (EEE), while SGB provides gold exposure with potentially higher returns. Let's compare in detail.

Quick Verdict

Ideally have both: PPF for guaranteed returns + 80C benefit, SGB for higher growth + gold exposure. If choosing one, PPF for conservative investors, SGB for growth seekers.

SGB wins: 3 metricsPPF wins: 3 metrics

Side-by-Side Comparison

Metric	Sovereign Gold Bond	PPF
Expected Returns SGB has higher potential	10-12% (variable)	7.1% (current rate)
Return Type PPF rate is predictable	Variable (gold based)	Fixed (govt rate)
Tax Benefit PPF has guaranteed EEE; SGB tax benefit limited from Apr 2026	Tax-free for original subscribers only	EEE (80C + exempt)
Lock-in Period SGB has shorter lock-in	5-8 years	15 years
Partial Withdrawal SGB more flexible	Sell on exchange	After 7 years
Asset Class Different diversification	Gold (commodity)	Debt (govt backed)
Loan Facility Both offer loan facility	Yes (banks accept)	Yes (against PPF)
Extension Option PPF can be extended	No	Yes (5 year blocks)

SGB Advantages

Higher historical returns (10%+ CAGR)
Shorter effective lock-in (5 years)
Gold provides inflation hedge
Can sell on exchange anytime
Portfolio diversification (non-rupee asset)
Tax-free maturity for original subscribers

PPF Advantages

Section 80C tax deduction (₹1.5 lakh)
EEE status - completely tax-free
Guaranteed returns - no volatility
Can extend indefinitely
Loan facility against balance

Which Should You Choose?

Choose SGB if you...

Those who've maxed 80C elsewhere
Growth-oriented long-term investors
Portfolio diversification seekers
Those wanting shorter lock-in

Choose PPF if you...

Tax savers under Section 80C
Conservative investors
Very long-term planners
Those preferring certainty

Detailed Analysis

**Tax Treatment (Updated for Budget 2026)** PPF has EEE status: 80C deduction on investment, tax-free interest, and tax-free maturity. From April 2026, SGB tax-free maturity is only for original subscribers. Secondary market buyers pay 12.5% LTCG. PPF's tax advantage is now more certain and universal.

**Returns Comparison** PPF: Current 7.1%, historically 8-12%. SGB: Historically 10-12% (gold + 2.5% interest). SGB has higher potential but with uncertainty and now reduced tax benefit for secondary buyers.

**Lock-in Reality** PPF: 15 years with partial withdrawal after 7 years. SGB: 8 years but RBI exit after 5 years or sell on exchange anytime. SGB offers more flexibility.

Calculate Your SGB Returns

Use our calculator to estimate your potential returns based on investment amount and holding period.

Frequently Asked Questions

Yes, ideally. PPF gives guaranteed returns + 80C benefit. SGB gives gold exposure + higher potential returns. Together they provide both safety and growth in your portfolio.

Both are good. PPF suits conservative retirees wanting fixed income. SGB suits those who want inflation hedge and are comfortable with gold price movements.

No, SGB is not eligible for Section 80C deduction. If tax saving is a priority, contribute to PPF first (up to ₹1.5 lakh), then consider SGB for additional investment.

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