Government securities denominated in grams of gold, issued by RBI on behalf of Government of India
Government securities denominated in grams of gold, issued by RBI on behalf of Government of India
Sovereign Gold Bonds (SGBs) are government securities denominated in multiples of grams of gold. They are issued by the Reserve Bank of India (RBI) on behalf of the Government of India.
SGBs offer an alternative to holding physical gold. Investors are assured of the market value of gold at the time of maturity and periodical interest income. The bonds are held in demat form, eliminating the risk of holding physical gold.
Key features: - Minimum investment: 1 gram - Maximum investment: 4 kg per financial year for individuals - Tenure: 8 years with exit option after 5th year - Interest: 2.5% per annum paid semi-annually - Tax benefit: Capital gains tax exemption if held till maturity
SGBs are issued in tranches by RBI and can also be bought from secondary markets (stock exchanges).
The theoretical value of an SGB based on current gold price and time to maturity
The total expected annual return if an SGB is held until maturity
The current market price of gold, typically quoted in INR per gram or per 10 grams
India's central bank that issues Sovereign Gold Bonds on behalf of the government