Sovereign Gold Bond - Interest Rates, Benefits & Upcoming SGBs Issues 2026

Sovereign Gold Bonds (SGBs) are government securities, which the Reserve Bank of India (RBI) issues on behalf of the Government of India. Launched in November 2015, under the Gold Monetisation Scheme, SGB offers investors an alternative option to investing in physical gold without bearing the inconvenience and costs associated with holding it.

The interest rates of Sovereign Gold Bond tranches are set by the RBI at the time of their issuance, based on the domestic and international market conditions. Thus, the interest rates of SGBs can vary from one SGB tranche to another. For example, SGBs were first introduced, i.e., on November 30, 2015, at a fixed interest rate of 2.75% p.a. This was revised to 2.50% p.a. from October 2015 onwards and which has continued till the issuance of the last tranche on February 21, 2024. The interest is calculated on the amount of initial investment and is credited semi-annually to the bank account of the investor. The last interest will be payable on maturity along with the principal.

The benefits of investing in Sovereign Gold Bonds are:

While investing in Sovereign Gold Bonds is beneficial in many ways, however, it also comes with a few disadvantages, such as:

SGB vs Physical Gold vs Gold ETFs vs Gold Mutual Funds vs Digital Gold

Feature	SGB	Physical Gold	Gold ETFs	Gold Mutual Funds	Digital Gold</th
Backed By	Govt. of India	Jewellers/Banks	AMCs	AMCs	Private platforms
Returns	Capital gains + 2.5% p.a. interest	Capital gains (minus making/wastage charges)	Capital gains	Capital gains (after expense ratio)	Capital gains
Risk of theft/purity issues	NIL	High	NIL	NIL	NIL
Liquidity	Medium (best at maturity)	High	High	High	High
Tax on Capital Gains	Applicable on prematurity redemption; Tax-free capital gains at maturity	Applicable	Applicable	Applicable	Applicable
Storage Costs	None	Locker charges	None	None	None
Minimum Investment	Price of 1 gram	Varies	Price of 1 unit (~1 gram)	Varies by fund	As low as ₹1
Lock-in Period	8 years (early exit available from 5th year)	None	None	None	None
Tradability	Traded on exchanges	Can be sold anytime	Traded on exchanges	Redeemed directly from the fund	Redeemed directly from the platform

The tenor of the SGBs is 8 years. However, one can also encash/ redeem the bond after 5th year from the date of issue on coupon payment dates.

On maturity: The investor will be advised one month before maturity. On maturity, the gold bonds will be redeemed in Indian rupees based on the selling price published by the Indian Bullion and Jewelers Association Limited. The interest and redemption proceeds will be credited to your bank account.

Premature redemption: Investors need to approach the concerned bank or issuing authority 30 days before the coupon payment date. The request for premature redemption will only be entertained if the investor approaches the concerned bank at least one day before the coupon payment date.

On maturity, the redemption proceeds will be equivalent to the prevailing market value of gold (per gram) originally invested. The selling price of Sovereign Gold Bonds will be decided on the basis of the closing price of 999 gold purity of the last 3 business days of the week from the date of repayment, published by the Indian Bullion and Jewelers Association Limited.

The interest on Sovereign Gold Bonds is taxable as per the investor’s tax slab. The capital gains tax to an individual will depend on the period of holding. Sovereign Gold Bonds held for less than a year are considered as short-term capital gains and are taxed as per the investor’s tax slab rate. SGBs held for a period of more than a year would be considered long-term capital gains, which would be taxed at 12.5% (without indexation). The indexation benefits will be provided to long term capital gains arising to any person on transfer of bond.

All Indian residents as defined under the Foreign Exchange Management Act, 1999 are eligible to invest in Sovereign Gold Bonds. Eligible investors include:

Note: Minors can also apply for this scheme but for this, parents or legal guardians will have to submit the application on their behalf.

SGB is a great investment option for:

Investors can invest in Sovereign Gold Bond scheme through an online or offline process.

Offline Process to Invest in Sovereign Gold Bonds

Note: The price of gold will be published on the RBI website two days before the issue opens.

Online Process to Invest in Sovereign Gold Bonds

To buy Sovereign Gold Bonds through an online process, the steps can vary, however broadly, the application process would be as follows:

Since the issuance of the last Sovereign Gold Bond tranche in February 2024 (Series IV, 2023-24), no fresh SGBs have been issued by the RBI. Any future issuance of SGBs will be announced by the RBI and the Government of India.

When a new SGB tranche is announced, details such as the subscription window, issue price, allotment date, online discount and interest applicability are published on the RBI’s official website through press releases and notifications. The same information may also be available on the websites of the participating banks, stock exchanges, post offices and other registered offices. Until then, investors holding SGBs will continue to receive interest payments as per the existing schedules and may redeem it prematurely (after 5^th year) or at maturity as per the RBI rules applicable to their series.