Sovereign Gold Bond (SGB) Calculator
Sovereign Gold Bond (SGB) Calculator
For existing Sovereign Gold Bond holders: the interest paid over the life of the bond, what you get at redemption for a gold price you enter, and the total return and annual growth rate.
SGB return
10 grams bought at $3,000 a gram, held 8 years, gold at $11,000 a gram at redemption
Sovereign Gold Bond payout
- I, R
- the issue price and the redemption price per gram
- g
- grams (units) held
- r
- the interest rate, 2.5% a year, paid half-yearly on the issue value
- y
- years held: 8 at maturity, or 5 to 7.5 on an early-redemption date
Worked example
10 grams bought at $3,000 a gram, held 8 years, gold at $11,000 a gram at redemption
Invested = 3,000 × 10 = $30,000
Interest each half-year = 30,000 × 2.5% ÷ 2 = $375; 16 payments = $6,000
Redemption = 11,000 × 10 = $1,10,000
Total = 1,10,000 + 6,000 = $1,16,000
CAGR with interest 18.42% a year; gold price alone 17.63%
10 grams at 3,000, gold at 11,000 on redemption, by holding period
| Held | Interest payments | Interest | CAGR with interest |
|---|---|---|---|
| 5 years | 10 | $3,750 | 30.55% |
| 6 years | 12 | $4,500 | 25.01% |
| 7 years | 14 | $5,250 | 21.20% |
| 8 years | 16 | $6,000 | 18.42% |
How a Sovereign Gold Bond pays you
Sovereign Gold Bonds are Government of India securities issued by the Reserve Bank of India and denominated in grams of gold. They pay you in two ways. First, interest: 2.50% a year, fixed, on the amount you originally invested, credited to your bank account every six months. The very first tranche, in 2015, paid 2.75%. Second, at redemption you receive the gold price of the day for each gram, based on the average of the India Bullion and Jewellers Association’s closing prices for 999 gold over the previous business days. The interest does not grow with the gold price; the redemption value does.
Term and early exit. The bond runs for 8 years. RBI allows early redemption after the fifth year, only on interest-payment dates, so the choices are 5, 5.5, 6 and so on up to 7.5 years. SGBs are also listed on stock exchanges and can be sold there at any time, but the market price is often below the gold value.
Two ways to count the return. The page’s annual growth rate treats everything as received at the end: in the example, 1,16,000 back on 30,000 over 8 years is 18.42% a year. Because the interest actually arrives every six months, the internal rate of return counting each payment on its date is higher, 19.24%. The gold price alone grew 17.63% a year, so the interest added 0.78 percentage points a year on the simple measure and 1.60 counting each payment on its date. For growth rates on other holdings, see the CAGR calculator; to see a sum in today’s money, the inflation calculator.
No new issues. The last tranche, 2023-24 Series IV, was issued on 21 February 2024. After the Union Budget of February 2025 the Finance Minister indicated the scheme had in effect been discontinued, and the Economic Affairs Secretary described the bonds as very high-cost borrowing for the government. No tranche has been issued since. Existing bonds continue to pay interest and are redeemed as scheduled. To value physical gold, use the gold price calculator.
Tax, in outline. The interest is taxable as income; enter your own rate to see it after tax. Under the Income-tax Act, 1961, the capital gain on redemption of an SGB by an individual was exempt, while a sale on the stock exchange was taxed as a capital gain. The Income-tax Act, 2025 replaced the 1961 Act from 1 April 2026, so check the current provisions or ask a tax adviser before relying on either treatment. This is arithmetic on the figures you enter, not financial advice.
Frequently asked questions
How is interest on a Sovereign Gold Bond calculated?
2.5% a year on the amount you invested, paid half-yearly. On 30,000 that is 375 every six months, 6,000 over 8 years. It does not change with the gold price.
When can I redeem a Sovereign Gold Bond early?
After the fifth year from issue, on an interest-payment date, through your bank, post office, broker or RBI Retail Direct, by the deadline before that date. You can also sell on a stock exchange at any time at the market price.
How is the SGB redemption price decided?
RBI announces it from the India Bullion and Jewellers Association’s published closing prices for 999 gold on the business days before the redemption date. It is the price per gram you receive.
Are new Sovereign Gold Bonds still being issued?
No. The last tranche was issued on 21 February 2024, and after the February 2025 Budget the government indicated it would not issue more. Existing bonds are unaffected.
Is SGB redemption tax-free?
Under the Income-tax Act, 1961, capital gains on redemption by an individual were exempt; interest was always taxable. The Income-tax Act, 2025 applies from 1 April 2026: check the current provisions.
Related calculators
References
- Reserve Bank of India. Sovereign Gold Bond Scheme — FAQs (updated 4 February 2019): interest at 2.50% a year on the amount of initial investment, credited semi-annually; tenor 8 years; early redemption after the fifth year on coupon payment dates; redemption price from IBJA’s closing prices for 999 gold; capital gains on redemption by an individual exempt. rbi.org.in
- Reserve Bank of India. Premature redemption under the SGB Scheme: first premature redemption, SGB 2017-18 Series I (issued 12 May 2017), on 12 May 2022 (reported by Business Standard, 10 May 2022).
- Government of India, Ministry of Finance. Post-Budget remarks, February 2025, on the discontinuation of new SGB issues (reported by Outlook Business). Last tranche: SGB 2023-24 Series IV, issued 21 February 2024.
- Income-tax Act, 1961 (capital gains on redemption of Sovereign Gold Bonds by an individual exempt); replaced by the Income-tax Act, 2025 from 1 April 2026.
- Central-bank inflation targets used as default inflation by currency: Reserve Bank of India (4% CPI, flexible inflation targeting framework); U.S. Federal Reserve (2% PCE); European Central Bank (2%); Bank of England (2% CPI); Bank of Canada (2%); Reserve Bank of Australia (2–3%); Bangko Sentral ng Pilipinas (3% ± 1). Actual inflation often runs above target.