Sovereign Gold Bond Calculator (Interest, Maturity Value, Tax & vs Gold ETF)

How it works

interest = 2.5% × issue price × grams, paid half-yearly, taxed at slab · redemption = grams × gold price at exit (RBI: 3-day average of 999 gold) · capital gain exempt on RBI redemption (maturity or year 5–7); LTCG 12.5% if sold on the exchange · total = redemption − CG tax + after-tax interest · CAGR = (total ÷ invested)^(1/years) − 1

A Sovereign Gold Bond is gold on paper issued by the Reserve Bank: each unit tracks a gram of pure gold and is redeemed at the prevailing price after eight years, so the investor gets gold's appreciation without storage, purity or making-charge worries, plus a fixed two and a half percent a year on the original issue price that no other gold route pays. The decisive feature is tax — the capital gain is exempt when the bond is redeemed through the RBI, at maturity or in the early windows from year five — while interest is taxed as income. The trade-off is liquidity, since fresh issues have paused and the exchange market is thin, which makes it a hold-to-maturity instrument.

Worked example

Twenty grams bought at ₹6,263 (₹1.25 lakh) and held to maturity, with gold at ₹10,100 today and growing 8% a year for the remaining 7 years, redeem at about ₹17,300 a gram — ₹3.46 lakh, tax-free — plus ₹25,000 of interest over 8 years (about ₹17,200 after 30% tax): roughly ₹3.63 lakh in all, a 14.2% annual return versus about 11.8% from a gold ETF and 10.6% from jewellery-grade physical gold on the same price path.

Frequently asked questions