Sovereign Gold Bond (SGB) — Complete Guide
Government-backed gold you never have to store — earning 2.5% a year on top of the gold price (Wednesday, 12 August 2026).
What is a Sovereign Gold Bond?
A Sovereign Gold Bond is a security issued by the Reserve Bank of India on behalf of the Government of India, denominated in grams of gold. One bond = 1 gram of gold. You pay today's gold price, and instead of holding metal, you hold a bond that tracks the gold rate — with zero storage cost, zero making charges and no purity worries.
Why investors prefer SGB over physical gold
| Feature | Sovereign Gold Bond | Physical Gold |
|---|---|---|
| Extra return | 2.5% p.a. interest | None |
| Making charges | Nil | 8–25% |
| Storage / safety | Held in RBI records / demat | Locker cost & risk |
| Purity | 999 (24K) guaranteed | Depends on jeweller |
| Tax on maturity gains | Exempt (held to 8 yrs) | Capital gains taxable |
| GST on purchase | None | 3% |
Key terms
- Tenure: 8 years, with an exit option after the 5th year on interest-payment dates.
- Interest: 2.5% per year on the issue amount, paid half-yearly to your bank account.
- Minimum / maximum: 1 gram minimum; up to 4 kg per individual per financial year.
- Pricing: the issue price is the simple average of the closing 999-purity gold price (IBJA) of the last three business days before the subscription week — so it moves with the same rate you see here.
How to buy SGB
SGBs are sold in tranches announced by the RBI. Buy through your bank's net-banking, the stock exchanges (NSE/BSE), designated post offices, or brokers. Online applicants usually get a ₹50/gram discount. If no fresh tranche is open, you can buy older SGB units on the exchange in your demat account at the market price.
SGB — FAQ
What is today's gold rate for SGB reference?
SGB pricing follows 999 gold. Today 24K gold is about ₹14,924 per gram (Wednesday, 12 August 2026). The official issue price is set from the 3-day average at each tranche.
Is SGB interest taxable?
The 2.5% interest is taxable as per your income slab, but the capital gain on redemption at maturity is exempt from tax.
Can I sell before 8 years?
Yes — exit is allowed from year 5 on interest dates, or anytime by selling the units on the stock exchange.