What is a Sovereign Gold Bond (SGB)?
Sovereign Gold Bonds (SGBs) are government-backed financial securities issued by the Reserve Bank of India on behalf of the Government of India as a paper alternative to holding physical gold.
Advantages Over Physical Gold
- Annual Interest: Pays a fixed annual interest (~2.50% per annum) credited semi-annually into your bank account.
- Zero Storage Cost: No risk of theft, vault charges, or making charges deduction.
- Tax Exemption: Capital gains tax is 100% exempt if held until full 8-year maturity.