12. Precious Metals & Commodities

Sovereign Gold Bond

Gold-Linked Instruments

Government bond denominated in gold grams paying 2.5% annual interest (see also Bonds group).

Risk Level
Medium ★★★☆☆
Liquidity
🔴 Low
Min Investment
₹10
Ticket Size
₹10 (digital gold) / 1g ≈ ₹6,000
Ideal Horizon
5+ years
Region
India

📈 Historical Returns (Indicative)

1 Year
8–22%
3 Years
10–15%
5 Years
10–14%
10 Years
9–13%
20 Years
9–12%

⚠️ Indicative historical ranges only. Past performance does not guarantee future results. Returns vary significantly across individual instruments.

🧮 XIRR Calculator — Sovereign Gold Bond

Enter your actual investment dates and amounts to calculate your personal annualised return (XIRR). Use negative values for money invested, positive for money received back.

✅ Pros & ❌ Cons

Advantages

  • ✅ Predictable income stream
  • ✅ Capital preservation
  • ✅ Inflation hedge
  • ✅ Safe haven during crises

Disadvantages

  • ❌ Low liquidity — funds may be locked in for years
  • ❌ Returns may not beat inflation
  • ❌ Interest rate risk for long-duration bonds
  • ❌ No income/dividends generated

🚀 How to Invest in Sovereign Gold Bond

  1. For G-Secs: RBI Retail Direct portal (www.rbiretaildirect.org.in)
  2. For corporate bonds/NCDs: NSE/BSE primary market during NFO period
  3. Secondary market: through Demat account or bond platforms (Wint, GoldenPi)
  4. Minimum investment varies; check prospectus

💰 Tax Treatment (India)

STCG at slab rate (< 2 years), LTCG 12.5% without indexation (> 2 years, post Budget 2024)
Sovereign Gold Bond interest: taxable. SGBs: no capital gains if held to maturity
Disclaimer: This page is for educational purposes only and does not constitute financial advice. Returns shown are indicative historical ranges and not guaranteed. Consult a SEBI-registered investment advisor before investing.
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