How do I choose an SGB, calculate the correct price, and buy it?

General
1

I want to invest some money in gold and I’m considering Sovereign Gold Bonds (SGBs).

I understand that SGBs are traded on the NSE, and I can buy them through Zerodha. However, I’m confused because there are many different trading symbols. What do these symbols mean?

For example, what does this trading symbol mean: “SGBJUL28IV-GB”?

  • Does this bond mature in July 2028?
  • If yes, what happens at maturity, how do I receive the money? Will it be credited to my bank account, or does it work differently?

I also have questions about pricing:

Right now, it is trading around ₹15,350–₹15,400.

  • What does this price represent?
  • What exactly am I buying at this price?
  • How do I calculate how much gold (in grams) I am effectively buying?

And about returns:

  • How much interest will I earn on this SGB?
  • Is the interest paid separately, and how often?

Finally, taxation:

  • If I sell it on the exchange before maturity, how much tax will I have to pay?
  • How is the tax different if I hold it until maturity?

Any clear explanation (preferably with an example calculation) would be really helpful.

2

Does this bond mature in July 2028?

Yes.

If yes, what happens at maturity, how do I receive the money? Will it be credited to my bank account, or does it work differently?

Credited to bank

I also have questions about pricing:

Right now, it is trading around ₹15,350–₹15,400.

What exactly am I buying at this price?

You’re buying a promise by GOI to give you the price of 1g of 999 Gold as per ibjarates.com based on last 3 working days before maturity and pay interest of 2.5% on issue price. GOI has the power to unilaterally revoke that promise.

What does this price represent?

The current combined faith of market participants in the ability of GOI to fulfill the said promise

How do I calculate how much gold (in grams) I am effectively buying?

0g. Price is linked to 1g of gold by GOI promise. There is no underlying gold that you’re buying.

And about returns:

How much interest will I earn on this SGB?

2.5% on “issue price”. Based on current price, it’ll be 1% or less

Is the interest paid separately, and how often?

Semi annually. Interest payment dates for Sovereign Gold Bonds (SGBs)

Finally, taxation:

If I sell it on the exchange before maturity, how much tax will I have to pay?
Actual LTCG/STCG rates

How is the tax different if I hold it until maturity?

From 1 Apr 2026: No difference. Only if you buy directly from RBI upon first issue and hold till maturity, you’ll get tax free redemption.
Before 1Apr 2026: If redeemed with RBI, no tax, regardless of where you bought it.

Also try https://sgb.vercel.app/

3

So If i buy an SGB today via Zerodha, is it tax free? Since it is before 1st april 2026?

4

No. If you had bought before and redeemed before Apr 1, 2026, then gains are tax free.