Comparisons
Gold ETF vs Sovereign Gold Bonds India
Compare liquidity, returns, tax, and storage for digital gold exposure in India.
Gold ETF
Traded on NSE/BSE like stocks. Tracks domestic gold price minus expense ratio (~0.5%). Highly liquid — sell anytime in market hours. LTCG 12.5% after 12 months (with ₹1.25L exemption on equity-oriented; gold ETFs may be treated as non-equity — verify fund structure).
Sovereign Gold Bonds
Issued by RBI in tranches. 8-year tenure, exit from year 5. 2.5% annual interest credited semi-annually. Capital gains tax-free if held to maturity. Limited liquidity in secondary market. Max 4 kg per individual per year.
Decision guide
- Long-term hold to maturity: SGB wins on tax + 2.5% interest.
- Need liquidity/trading: Gold ETF.
- Portfolio allocation 5–10%: Either works; SGB tranche timing requires planning.
- Physical for weddings: Keep separate from investment allocation.
Related tools
Frequently asked questions
Can NRIs buy SGB?
No. SGB is for resident Indians only. NRIs can consider Gold ETFs via NRE/NRO demat.
Which has no storage cost?
Both — SGB and Gold ETF are paper/digital. Physical gold has making charges and locker costs.
SGB extra return?
SGB pays 2.5% annual interest on issue price plus gold price appreciation — unique advantage over ETFs.
Disclaimer: This guide is for educational purposes only. Not SEBI-registered investment advice. Consult a qualified advisor before making financial decisions.