SGB Calculator
Calculate your Sovereign Gold Bond returns
Investment Details
Gold Price Appreciation
Tenure: 8 years with exit option after 5th year
Year-wise Projections
| Year | Gold Price/g | Gold Value | Cum. Interest | Total Value | Exit |
|---|---|---|---|---|---|
| Year 1 | ₹7,020 | ₹5,40,000 | ₹12,500 | ₹5,52,500 | No |
| Year 2 | ₹7,582 | ₹5,83,200 | ₹25,000 | ₹6,08,200 | No |
| Year 3 | ₹8,188 | ₹6,29,856 | ₹37,500 | ₹6,67,356 | No |
| Year 4 | ₹8,843 | ₹6,80,244 | ₹50,000 | ₹7,30,244 | No |
| Year 5 | ₹9,551 | ₹7,34,664 | ₹62,500 | ₹7,97,164 | Yes |
| Year 6 | ₹10,315 | ₹7,93,437 | ₹75,000 | ₹8,68,437 | Yes |
| Year 7 | ₹11,140 | ₹8,56,912 | ₹87,500 | ₹9,44,412 | Yes |
| Year 8 | ₹12,031 | ₹9,25,465 | ₹1,00,000 | ₹10,25,465 | Yes |
* Exit is available after the 5th year on interest payment dates. Capital gains are tax-free only at maturity (Year 8).
SGB Returns
What are Sovereign Gold Bonds (SGB)?
Sovereign Gold Bonds (SGB) are government securities denominated in grams of gold, issued by the Reserve Bank of India on behalf of the Government of India. They offer an alternative to holding physical gold, combining the benefits of gold price appreciation with an additional fixed interest income of 2.5% per annum.
Key Features
SGBs have a tenure of 8 years with an exit option after the 5th year. The bonds are issued in multiples of grams of gold with a minimum investment of 1 gram. Interest is paid semi-annually at 2.5% per annum on the initial investment value. The redemption price is based on the simple average of the closing gold price for the three business days preceding the redemption date.
Benefits of SGB
- Capital gains tax exemption on redemption at maturity (8 years)
- Additional interest income of 2.5% per annum paid semi-annually
- No storage cost or risk of theft unlike physical gold
- Can be used as collateral for loans
- Tradable on stock exchanges for early exit
Using the SGB Calculator
Use our calculator to estimate your total returns from Sovereign Gold Bonds. Enter your investment amount, current gold price, and expected appreciation rate to see projected gold value, interest income, total returns, and tax implications over the 8-year tenure.
Why SGBs Are the Best Way to Own Gold
SGBs combine gold price appreciation with a 2.5% annual coupon, zero storage costs, zero making charges, and tax-free capital gains on maturity. No other gold investment vehicle offers this combination. The only downside is the 8-year lock-in (with exit after 5 years) and limited liquidity on the secondary market.
Frequently Asked Questions
What are Sovereign Gold Bonds?
Sovereign Gold Bonds (SGBs) are government securities denominated in grams of gold. Issued by RBI on behalf of the Government of India, they offer gold price appreciation plus 2.5% annual interest. SGBs have an 8-year tenure with an exit option after 5 years.
Are SGBs tax-free?
Capital gains on SGBs held to maturity (8 years) are completely tax-free. The 2.5% annual interest is taxable at your slab rate. If sold before maturity on the secondary market, LTCG tax of 12.5% applies on gains.
How do I buy SGBs?
SGBs are issued in tranches by RBI throughout the year. You can buy them through banks, post offices, stock exchanges (NSE/BSE), and SHCIL. Buying online through a bank offers a Rs 50 per gram discount. You can also buy previously issued SGBs on the secondary market via your demat account.
