Sovereign Gold Bond, abbreviated as SGB, is a government security issued by the Reserve Bank of India (RBI) on behalf of the Government of India. It is denominated in grams of gold and is linked to the price of gold in India. It is also an interest-bearing bond, carrying an interest of 2.5% paid in two installments every year till maturity.

The bond has an 8-year term with an option for early withdrawal through the RBI after 5 years. It is listed and traded on Indian stock exchanges, allowing eligible investors to buy or sell anytime through their demat accounts. It can also be transferred to other eligible investors without redemption through the RBI.

The scheme was discontinued in 2024 due to being an expensive method of borrowing for the government. Existing bonds were not affected.

History The scheme was initially announced in the 2015 Union budget. It was approved by the cabinet on 9 September 2015, and was launched by Prime Minister Narendra Modi in an event in New Delhi on 5 November 2015. The event was also attended by the Union Minister for Finance Arun Jaitley, the Minister of State for Finance Jayant Sinha and the Minister of State for Commerce & Industry Nirmala Sitharaman. The Gold Monetisation Scheme, Indian Gold Coins and Sovereign Gold Bonds were all launched in the same event.

The scheme was introduced due to a forex crisis caused by high gold imports. Most of the demand for gold in India is met through imports and it was believed that such a scheme would ultimately help in reducing the country’s current account deficit.

It was first notified by the Department of Economic Affairs on 14 January 2016 under the Government Securities Act, 2006. The initial subscription allowed investors to buy a minimum of 2 grams, and a maximum of 500 grams. It was open from 18 to 22 January 2016 and attracted ₹245.2 of investments. The bonds initially paid 2.75% interest per year. This was later reduced to 2.5% per year for newer bonds. The bonds were sold through banks, post offices and through online securities brokers which would allow investors to hold the bonds in demat form.

In August 2024, the investors who would have redeemed the bonds issued in August 2016 lost suffered a loss due a fall in the price of gold. This fall was linked to the slash in import duty on gold from 15% to 6% during the 2024 Union budget of India. After the final redemption of the 2016-I series, it was rumoured that the scheme was turning out to be very expensive for the Indian government, due to an unexpected rise in the prices of gold. The government also felt SGBs have also not served the purpose for which it was launched, which was to bring down gold imports by trying to move demand from physical gold to an electronic form. In addition, the RBI has not issued any new series after February 2024. Physical gold purchases were made more attractive, by lowering their import duty from 15% to 6%. After the 2025 Union budget, Minister of Finance Nirmala Sitharaman confirmed that the government had no plans of launching more tranches of SGBs. Economic Affairs Secretary Ajay Seth said that it had turned out to be a high cost method of borrowing for the government compared to traditional bonds and that they had not seen the expected reductions in import of gold. It made no fiscal sense to continue with a scheme that was not beneficial for both the government and the economy.

The price for 10 grams of gold increased from Rs 26,300 in 2015 to about Rs 84,450 in March 2025, thus increasing the liability of the government to Rs 1.12 lakh crore, with investors holding about 132 tonnes of gold in SGBs.

In the 2026 Union budget, Nirmala Sitharaman announced that the capital gains exemption would be available only if SGBs were purchased at the time of issue and held till maturity. It would not be available if someone bought these bonds from the secondary market. On the day of this announcement, several series recorded a 10% drop in value, which also coincided with a crash in global price of the metal.

Eligibility

People residing in India, as defined in the Foreign Exchange Management Act, 1999 are eligible to invest in SGBs. These include individuals, Hindu Undivided Families (HUFs), universities, trusts, and charitable institutions. People who become non-residents after buying an SGB can still hold it until maturity or premature redemption.

The bonds are issued in 1-gram denominations and multiples thereof. Each eligible investor can purchase up to 4 kg per financial year. A demat account is optional; bonds can be held in dematerialized form with a securities depository or tracked by the RBI.

Price The issue price is the average closing price of 999 purity gold from the last 3 business days before the subscription period, as published by the India Bullion and Jewelers Association Limited (IBJA). The redemption price, for both early and maturity redemptions, is the average closing price from the 3 business days before repayment.

Comparison with other forms of gold investments SGBs, purely as an investment format, can be compared to other forms of investing in Gold. +Comparison of SGB, physical gold, gold ETFs and mutual funds and digital gold in IndiaSGBPhysical goldGold ETF and mutual fundsDigital goldStorageStored in government facilities. Very low risk of theft.Risk of theftStored in vaults. Low risk of theftStored in vaults. Low risk of theftRegulated byReserve Bank of IndiaNot regulatedSecurities and Exchange Board of IndiaNot regulatedChargesNo making charges, GST, or expense ratioMaking charges from 8% to 35%. GST of 3%. No expense ratio.No making charges or GST. Expense ratio up to 1% is allowed.No making charges. GST of 3% and commissions are applicable. No expense ratio.Interest Fixed at 2.5% per annumNo interest paymentsNo interest paymentsNo interest paymentsTaxationNo tax on capital gains if held from issue until maturity. Interest is taxed at slab.Tax on capital gainsTax on capital gainsTax on capital gainsLiqudityCan be sold on stock exchanges if held in demat form. Can be sold back to the RBI at specified intervals.Can be sold physically to jewelers anytimeUnits can be sold back to the asset management companyCan be liquidated instantly

Issue history + Data of Sovereign Gold Bonds (Tranche wise) issued till 23 April 2024 # Tranche ISIN Issue Date Issue price/unit(₹) Units subscribed(grams) Redemption price/unit(₹) CAGR Returns (Absolute)(%) 1 2015-I IN0020150085 10.87 (128.46) 2 2016-I IN0020150101 11.63 (141.19) 3 2016-II IN0020150119 10.75 (126.37) 4 2016-17 Series I IN0020160027 10.50 (122.44) 5 2016-17 Series II IN0020160043 10.80 (127.21) 6 2016-17 Series III IN0020160076 12.63 (159) 7 2016-17 Series IV IN0020160126 8,62414.37 (193.03) 8 2017-18 Series I IN0020170018 15.72 (221.5) 9 2017-18 Series II IN0020170034 16.97 (250.67) 10 2017-18 Series III IN0020170059 19.82 (325.14) 11 2017-18 Series IV IN0020170067 12,70419.82 (325.31) 12 2017-18 Series V IN0020170075 11,99219.04 (303.64) 13 2017-18 Series VI IN0020170083 12,06619.26 (309.71) 14 2017-18 Series VII IN0020170091 12,35019.67 (320.93) 15 2017-18 Series VIII IN0020170109 12,30019.47 (315.4) 16 2017-18 Series IX IN0020170117 12,48419.68 (321.19) 17 2017-18 Series X IN0020170125 12,82020.09 (332.96) 18 2017-18 Series XI IN0020170133 12,80120.11 (333.64) 19 2017-18 Series XII IN0020170141 13,24520.94 (358.3) 20 2017-18 Series XIII IN0020170158 13,56321.43 (373.24) 21 2017-18 Series XIV IN0020170166 13,48621.26 (359.93) 22 2018-19 Series I IN0020180033 14,90121.6 (378.52) 23 2018-19 Series II IN0020180249 24 2018-19 Series III IN0020180314 25 2018-19 Series IV IN0020180389 26 2018-19 Series V IN0020180462 27 2018-19 Series VI IN0020180561 28 2019-20 Series I IN0020190073 29 2019-20 Series II IN0020190081 30 2019-20 Series III IN0020190107 31 2019-20 Series IV IN0020190115 32 2019-20 Series V IN0020190370 33 2019-20 Series VI IN0020190388 34 2019-20 Series VII IN0020190461 35 2019-20 Series VIII IN0020190537 36 2019-20 Series IX IN0020190545 37 2019-20 Series X IN0020190552 38 2020-21, Series I IN0020200062 39 2020-21, Series II IN0020200088 40 2020-21, Series III IN0020200104 41 2020-21, Series IV IN0020200146 42 2020-21, Series V IN0020200161 43 2020-21, Series VI IN0020200195 44 2020-21, Series VII IN0020200203 45 2020-21, Series VIII IN0020200286 46 2020-21, Series IX IN0020200377 47 2020-21, Series X IN0020200385 48 2020-21, Series XI IN0020200393 49 2020-21, Series XII IN0020200427 50 2021-22, Series I IN0020210053 51 2021-22, Series II IN0020210061 52 2021-22, Series III IN0020210087 53 2021-22, Series IV IN0020210111 54 2021-22, Series V IN0020210129 55 2021-22, Series VI IN0020210145 56 2021-22, Series VII IN0020210178 57 2021-22, Series VIII IN0020210228 58 2021-22, Series IX IN0020210236 59 2021-22, Series X IN0020210319 60 2022-23, Series I IN0020220045 61 2022-23, Series II IN0020220078 62 2022-23, Series III IN0020220110 63 2022-23, Series IV IN0020220169 64 2023-24, Series I IN0020230069 65 2023-24, Series II IN0020230093 66 2023-24, Series III IN0020230168 67 2023-24, Series IV IN0020230184 Total146961537 (~147 tons)

References

External links

Sovereign Gold Bond Scheme FAQs - Reserve Bank of India Sovereign Gold Bonds Notifications - Reserve Bank of India

Further reading