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Strategy Guide

SGB Laddering Strategy

Create staggered maturities for regular liquidity events

**What is SGB Laddering?**

Laddering is a strategy where you build a portfolio of SGBs with different maturity dates, creating a "ladder" of regular liquidity events.

**How it works:** Instead of putting all money in one SGB series, you invest in multiple series maturing in different years. As each SGB matures, you have the option to: - Use the funds for planned expenses - Reinvest in a new SGB (extending the ladder)

**Example Ladder:** - 2027: SGB maturing - ₹2 lakhs - 2028: SGB maturing - ₹2 lakhs - 2029: SGB maturing - ₹2 lakhs - ...and so on

Benefits

  • Regular liquidity without selling at market prices
  • Tax-free maturity for original subscribers
  • Reduces timing risk on gold prices
  • Provides flexibility for planned expenses
  • Automatic rebalancing through maturities

Risks & Considerations

  • Requires significant initial capital
  • Limited SGB series availability on secondary market
  • Older series may have lower liquidity
  • Complex to set up initially
  • Interest rate risk across different issue prices

Step-by-Step Implementation

1

Plan your ladder duration

Decide the span of your ladder (e.g., 5-year ladder, 8-year ladder).

Tips:

  • Match with financial goals
  • Consider available SGB maturities
  • Account for your investment horizon
2

Identify available SGB series

List SGBs maturing in each year of your planned ladder.

Tips:

  • Use SGB Analyzer to see all maturities
  • Check trading volume for each series
  • Compare discounts across series
3

Allocate capital across rungs

Decide how much to invest in each maturity year.

Tips:

  • Equal allocation for simplicity
  • Or weight by expected expenses
  • Consider current discounts for allocation
4

Build the ladder

Purchase SGBs for each rung of your ladder.

Tips:

  • Start with best-discount series
  • Build over time if capital is limited
  • Document your ladder plan
5

Manage ongoing

As each SGB matures, decide whether to use funds or extend the ladder.

Tips:

  • Reinvest at the far end to maintain ladder
  • Adjust for changed financial needs
  • Track overall portfolio metrics

Best For

  • Retirees planning regular income
  • Those saving for sequential goals
  • Investors wanting predictable liquidity
  • Long-term gold allocation strategy

Not Suitable For

  • Small investment amounts
  • Those needing immediate liquidity
  • Short-term investors
  • NRIs (cannot invest in SGBs)
**Disclaimer:** This strategy guide is for educational and informational purposes only. It does NOT constitute investment advice, financial advice, or a recommendation to buy or sell any securities. Investment strategies involve risks and may not be suitable for all investors. Past performance does not guarantee future results. Gold prices can be volatile and SGBs have lock-in periods. Please consult a SEBI-registered investment advisor before implementing any investment strategy. Consider your risk tolerance, investment horizon, and financial goals.

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Frequently Asked Questions

Typically 5-8 rungs work well, matching SGB's 8-year tenure. More rungs provide more frequent liquidity but require more capital to build.
Yes, you can build gradually. Start with 2-3 rungs and add more over time. The SIP strategy can help build a ladder progressively.
You can sell SGBs on the exchange before maturity. However, this may mean selling at a discount and losing tax-free maturity benefit.

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