Sovereign Gold Bond (SGB) Scheme is a government security issued by the Reserve Bank of India on behalf of the Government of India, and it is denominated in grams of gold. Investors can check the official Frequently Asked Questions (FAQ) on the scheme in PDF format at rbi.org.in before buying the bonds.
SGBs are substitutes for holding physical gold. Investors pay the issue price in cash, and the bonds are redeemed in cash on maturity. The scheme continues to run in 2026, with the Reserve Bank carrying out premature and final redemptions of earlier tranches through the year. Fresh issuance of new tranches has been paused since early 2024, but existing bondholders can still exit their investment as per the redemption calendar.
Sovereign Gold Bond Scheme 2026
Persons resident in India as defined under the Foreign Exchange Management Act, 1999 are eligible to invest in SGB. Eligible investors include individuals, HUFs, trusts, universities and charitable institutions. Individual investors whose residential status changes from resident to non-resident may continue to hold SGB till early redemption or maturity.
The quantity of gold for which the investor pays is protected, since the investor receives the ongoing market price at the time of redemption or premature redemption. The SGB offers a better alternative to holding gold in physical form, as the risks and costs of storage are removed. Investors are assured of the market value of gold at the time of maturity along with periodical interest.
Main Features of Sovereign Gold Bond
SGB is free from issues like making charges and purity checks that come with gold in jewellery form. The bonds are held in the books of the RBI or in demat form, which removes the risk of loss of scrip. The bonds carry a fixed interest rate of 2.50 per cent per annum on the initial investment, paid semi-annually to the bank account of the investor.
| Detail | Information |
|---|---|
| Scheme Name | Sovereign Gold Bond Scheme |
| Issued By | Reserve Bank of India on behalf of Government of India |
| Denomination | Grams of gold |
| Interest Rate | 2.50 per cent per annum (fixed) |
| Tenure | 8 years, with early redemption after 5 years |
| Eligible Investors | Individuals, HUFs, trusts, universities, charitable institutions |
| Official Website | rbi.org.in |
Who Can Apply
Resident Indians as defined under the Foreign Exchange Management Act, 1999 can invest in SGB. Eligible investors include individuals, Hindu Undivided Families (HUFs), trusts, universities and charitable institutions. Joint holding is allowed, and a minor can also invest through a guardian.
The bonds are issued in denominations of one gram of gold and in multiples thereof. Minimum investment is one gram, with a maximum limit of 4 kg for individuals, 4 kg for HUF and 20 kg for trusts and similar entities notified by the government per fiscal year. In case of joint holding, the limit applies to the first applicant.
How to Apply for Sovereign Gold Bond
The application form is provided by the issuing banks, SHCIL offices, designated Post Offices and agents. It can also be downloaded from the RBI website. Banks may also provide an online application facility.
STEP 1 - Visit the official RBI website at rbi.org.in and open the Sovereign Gold Bonds section to download the application form or check the list of authorised banks and offices.
STEP 2 - Fill in the application form with the required details, including the PAN number issued by the Income Tax Department, and submit it to the issuing bank, SHCIL office, designated Post Office or agent.
STEP 3 - Pay the issue price in cash (up to rupees 20000), cheque, demand draft or through electronic fund transfer. Investors applying online through a scheduled commercial bank get a discount of ₹ 50 per gram on the issue price.
FAQ's
What is the interest rate on Sovereign Gold Bonds?
The bonds carry a fixed interest rate of 2.50 per cent per annum on the initial investment. Interest is credited semi-annually to the bank account of the investor, and the last interest is payable on maturity along with the principal.
Can I redeem the bond before maturity?
Yes. Though the tenure of the bond is 8 years, early redemption is allowed after the fifth year from the date of issue on coupon payment dates. Investors can approach the concerned bank, SHCIL office or Post Office thirty days before the coupon payment date.
Is premature redemption happening in 2026?
Yes. The RBI has released the Sovereign Gold Bond redemption calendar for April to September 2026, listing the tranches eligible for premature and final redemption during this period. Investors must apply within the prescribed window before the coupon payment date.
What are the tax rules on Sovereign Gold Bonds?
Interest on the bonds is taxable as per the Income-tax Act, 1961. Capital gains tax arising on redemption of SGB to an individual has been exempted, and indexation benefits are provided on long-term capital gains arising on transfer of the bond.
Where can I get the official FAQ PDF?
The official FAQ on Sovereign Gold Bond Scheme is available on the RBI website at rbi.org.in. Investors can also check the full list of notifications, forms and redemption prices on the official Sovereign Gold Bonds page at rbi.org.in.
