Sovereign Gold Bond (SGB) Investment FAQs

A sovereign gold bond is an efficient alternative to investing in physical gold. It is issued by the government of India in one gram multiples. The government offers an assured rate of interest of 2.5 per cent per annum on the issue price, payable twice a year.

The SGB lock-in period is of eight years. Though you can redeem the bonds before the completion of eight years from the date of purchase.

You can apply for a sovereign gold bond online through commercial banks’ websites authorised to sell them. Mentioned below is the process to purchase SGBs online:

Login to the bank’s internet banking portal.


Click on ‘E-service’ and select the ‘Sovereign Gold Bond’ option.
Read the terms and conditions carefully before you click on the ‘Proceed’ option.
Fill the registration form and click on ‘Submit’.
Enter the nominee details and subscription quantity.
Click on ‘Submit’

After 8 years of issuance, your SGBs will mature and the total interest and the maturity amount of your bonds will be credited to your bank account. The interest will be credited on a semi-annual basis and the final interest payment will be due with the principal amount.

Individual investors, united Hindu families (UHFs), trusts, universities, and charitable institutions can invest in SGBs. If you invested in SGBs as an India resident but changed your status to a non-resident, you can still continue to hold the bonds until maturity. Minors can also apply for SGBs and their guardian can fill the application.

Both SGBs and FDs provide you with security on your investments. While FDs offer lower returns as compared to SGBs, they offer higher stability.

You should choose between FD and SGB based on your financial plans and budget. In SGBs, there is a possibility of capital loss if gold prices decline while FDs are not subject to market volatility.

The minimum purchase amount of SGBs is one gram of gold and the maximum buying limit is 4 kilograms for individual investors and 20 kilograms for trusts, in a financial year.

SGBs are issued with a maturity period of eight years. You can also opt for early redemption of SGBs after five years or sell the bonds in the secondary market.

No, you cannot buy SGBs every month. You can buy SGBs only when the RBI issues them. The RBI makes SGBs available for purchase in different tranches in one financial year.

The RBI releases four tranches of SGBs throughout a financial year (April-March).

If you apply for SGBs online and pay digitally, you will get a discount. The issue price for such purchases will be ₹50 lesser per gram than the nominal value.

SGBs are good investments as they offer guaranteed returns and security on your investments. You can also use it as collateral for obtaining loans from banks and financial institutions.

The RBI has not yet announced the issuance of SGB 2024-25 series.

Yes you can break SGB lock-in period. If you break SGB lock-in period before eight years, the gains you make will be treated as long-term capital gains and taxed accordingly. You will be taxed at a rate of 20 per cent of the indexed capital gains earned by you.

There is a cost if you break SGB lock-in period. You will be subject to higher capital gains tax payable at a rate of 20 per cent.

Yes you can gift or transfer an SGB to a friend, relative, or anyone else if they are eligible for holding a sovereign gold bond.

The value of sovereign gold bonds is based on the market price of gold. If the price of gold declines, then investors are at the risk of losing their invested capital.

Yes, you can claim the sovereign gold bond amount as a nominee upon the death of the investor. You can approach the respective bank from where the investor purchased the SGB and file a claim.

No, it is not illegal to break SGB lock-in period. You can break the SGB lock-in period of eight years, but you will be taxed on your gains at a higher rate.

Yes, joint holding of sovereign gold bonds is allowed.
If you need further financial guidance, visit Aditya Birla Capital for more information.