Full Form of SGB

What is SGB?

Sovereign Gold Bonds, commonly abbreviated as SGB, are government securities denominated in grams of gold issued by the Reserve Bank of India on behalf of the Government of India. Launched in November 2015 under the Gold Monetisation Scheme, these bonds offer an alternative to holding physical gold, allowing investors to invest in gold without the hassles of storage, purity concerns, or making charges. SGBs are issued in tranches throughout the year and can be purchased through banks, post offices, stock exchanges, or the National Stock Exchange. They come with a tenure of eight years, with an exit option after the fifth year, and pay a fixed interest rate of 2.5 percent per annum on the initial investment amount, payable semi-annually. At maturity, investors receive the prevailing market value of gold in rupees. The bonds are also tradable on stock exchanges, providing liquidity. SGBs carry sovereign guarantee, making them one of the safest investment options. For Indian competitive exams, questions on SGB frequently appear in banking, finance, and general awareness sections of examinations like IBPS, SSC, and UPSC. Investors should note that capital gains tax is fully exempted if held till maturity, making SGB a tax-efficient gold investment avenue compared to physical gold or gold ETFs.

SGB का फुल फॉर्म

Example

RBI announced the issue price for the upcoming tranche of SGB at ₹5,923 per gram of gold for retail investors.

SGB — frequently asked questions

Related full forms