Should I trade in Sovereign Gold Bond?

I want to put this question in two scenarios.

A. I have bought 10 units of SGB TR-IV @ Rs. 3119 when it was issued (similar to a stock IPO as mentioned by Nithin here ​ )

  1. What are the interest pay out dates for SGB TR-IV?
  2. Government is paying a fixed 2.5% per year return on invested value. Now my invested value is 31190 and I sold 5 units after listing. In that case on what value the Government is going to pay the interest? Is it 31190 or half of that 15595?
  3. The tenor of the bond is for a minimum of 8 years with option to exit in 5th, 6th and 7th years. What does it really mean if I can sell those units after listing?
  4. Suppose I never trade in SGB and wait till the end i.e. 2024. What will happen to my invested value? Will I get the sum of 10 gm gold (at the rate would be in 2024) transferred directly to my bank account? 

B. I have bought 10 units of SGB TR-IV @ Rs. 3500 one year after listing.

       5. My invested value is 35000. Will I get the interest paid by the Government for those 10 units?

       6. Does the exit options in 5th, 6th and 7th years apply to me? Because I have invested in SGB 

           exactly after one year?


  1. Interest is paid out every 6 months from the day the bonds are allotted.

  2. 15995

  3. You can encash/redeem the bond after the 5th year. What this means is that the government will if you want, give back your investment. Since these bonds are now traded on the exchanges, there is no real reason to encash/redeem, you can just sell it on the exchanges. But if liquidity dries up on exchanges ,you can encash/redeem.

  4. Yes

  5. Yes all bond holders will get interest.

  6. Yes, as long as you are holding the bond, the exit option will be applicable. Even if you buy it in the 4th year, you can exit it on the 5 th if you wish.

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I have two doubt:

  1. Dividend payment will be credited in Demat account or Bank account?

  2. Dividend payout will be done twice in year. Consider if I bought somewhere in between of this duration, let say on 1st march. Then I will get dividend paid after remaining till predefined date or after 6 months?

  1. Dividend will be credited to your bank account. Unlike liquidbees where the dividend is in the form of fund units, here dividend is in rupees. So, it can’t be credited to your demat account.

  2. I am not sure. Because of the T+2 settlement, dividend might be calculated either from the day you buy the bond or from the day it is in your demat account.

In 2017 dividend for Sovereign Gold Bonds 2.75% AUG 2024 Tr-IV had been paid in the month of February and August.

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The interest on SGB’s is paid twice a year. The price at which the SGB that trades on the secondary market carries the accrued interest, so if you’re buying the bonds closer to the due date of the interest, the price will be higher. On the date the dividend is paid, the price of the bond drops. In the Bond market, it’s referred to as the ‘Dirty price’; i.e the price of the Bond includes accrued interest.


Can I buy SGB from NSE and hold for 8 years to make sure government buys at market price from me and I also get capital gains exemption?

Regarding the answer to Question 5, how will the government/RBI know the bank account number to deposit the interest in? When the original buyer buys the bond, he/she furnishes the Bank account details in the application form. How does this get updated when one sells the bond in secondary market?

These held in demat and the depository will have the details of the holder.

In what frequency LIQUIDBEES add additional units (dividend ) in to the DMAT account? monthly fixed date or based on your purchase date ?
what is the current yield now ?

How is this query related to this thread? Aren’t there Liquidbees specific thread?

From reading a couple of threads on this and even the NSE website, I wasn’t clear on one thing. I would love if someone can clarify this.

If I buy a SGB on exchange at say 4000 but the value of the tranche when that particular SGB was launched is 3500. Do I get interest at my buy value or value of the SGB when it was launched i.e. 3500. I think it should be 3500 if I am not mistaken as the price on exchange is just notional. Am I right?

Also, will the tax free on maturity after 8 years be still valid if I say bought it in fourth year?

The interest is paid on the issue price.

Regarding benefit of exemption from capitals gains for purchasing from secondary market, there isn’t much clarity over this.

It is tax free even if you bought the units from secondary market.