Sovereign Gold Bond (SGB) Calculator
This Sovereign Gold Bond (SGB) calculator projects the total return you'd receive from an RBI-issued SGB — combining the fixed 2.5% p.a. interest paid out in cash over your holding period with the redemption value based on your assumed gold price growth. Enter your investment amount, expected annual gold price growth and holding period (SGBs mature at 8 years, with early exit permitted from year 5) to see your projected total value.
The amount you invest in Sovereign Gold Bonds, based on the issue price set at the time of subscription.
SGB redemption value tracks the market gold price at maturity — this is your assumption for how much gold prices will rise per year on average, not a guaranteed rate.
SGBs mature at 8 years; early exit is allowed from year 5 via RBI redemption windows or the secondary market.
Total value received (redemption + interest)
Log in to save₹2,05,093
Fixed interest on your original investment, paid out in cash — not compounded or reinvested into more gold.
How to use this sovereign gold bond calculator
- 1Investment amount: how much you put into SGBs, based on the issue price at subscription (SGBs are issued in grams of gold, priced at the average gold rate for a few days around the issue date).
- 2Expected annual gold price growth: your own assumption for how much gold prices will rise per year on average until redemption — this is not guaranteed and drives most of the uncertainty in the projection.
- 3Holding period: SGBs have a fixed 8-year tenor; RBI opens early redemption windows from year 5 onward, and bonds can also be sold on the secondary market if listed.
Understanding your results
Total value received is the sum of your redemption value and all interest received — the full return from holding the bond. Redemption value at maturity is what your gold-linked investment is worth based on your assumed gold price growth, since SGB redemption tracks the prevailing gold price rather than a fixed amount. Total interest received is the fixed 2.5% p.a. paid out on your original investment amount — this is simple interest, not compounded, and it's a separate cash payout on top of the redemption value, not added into it.
The formula
Interest total = Investment × 2.5% × Years; Redemption value = Investment × (1 + Gold growth rate)^Years; Total value received = Redemption value + Interest totalSGBs pay a fixed 2.5% p.a. interest on your original investment amount, credited to you as cash (in practice, in two half-yearly instalments) — it is never compounded or reinvested into more gold, so it simply accumulates as Investment × 2.5% × number of years. Separately, the amount you get back when the bond is redeemed tracks the market gold price at that time, not a fixed number — this calculator models that as your original investment compounding at your assumed annual gold price growth rate. The total value you receive is these two components added together: the redemption value (driven by gold price movement) plus the total interest collected along the way (a fixed, government-guaranteed payout).
A worked example
₹1,00,000 invested, held the full 8-year term, assuming 8% average annual gold price growth: total interest received = ₹1,00,000 × 2.5% × 8 = ₹20,000. Redemption value = ₹1,00,000 × 1.08⁸. Since 1.08² = 1.1664, 1.08⁴ = 1.1664² = 1.36048896, and 1.08⁸ = 1.36048896² ≈ 1.85093 — redemption value ≈ ₹1,85,093. Total value received = ₹1,85,093 + ₹20,000 ≈ ₹2,05,093.
Things to know
The 2.5% p.a. interest rate on SGBs is fixed by the government and has stayed consistent across tranches, but the redemption value depends entirely on where the market gold price actually ends up — the growth rate here is your own assumption, not a promise. The Government of India paused new SGB issuances after FY 2023-24, so this calculator is most useful for projecting the value of an SGB tranche you already hold; check current RBI announcements before assuming a new tranche is available to invest in. Interest income is taxable at your slab rate each year it's paid. Always verify current terms, redemption windows and tax rules against official RBI or Income Tax Department guidance before making a real decision.
Frequently asked questions
Is the interest I receive from an SGB taxable?+
Yes — the 2.5% p.a. interest is taxable as income at your slab rate in the year it's received (typically paid out in two half-yearly instalments). This is different from the capital gains treatment on the gold-price-linked redemption amount, which is handled separately.
What's the big tax advantage of SGBs over physical gold or a gold ETF?+
If you hold an SGB to its full 8-year maturity and redeem it, the capital gains arising from gold price appreciation are entirely tax-exempt for individual investors — a real, distinctive advantage. Physical gold and gold ETFs, by contrast, attract capital gains tax on any appreciation when sold, regardless of holding period. This exemption is specific to redemption at maturity (or via the official RBI early-redemption window); selling an SGB on the stock exchange before maturity is treated as a normal capital asset transfer and may attract capital gains tax.
Can I exit an SGB before the 8-year maturity?+
Yes — RBI permits early redemption from the 5th year onward, on the interest payment dates, through a specific redemption window. SGBs listed on stock exchanges can also be sold in the secondary market at any time, though liquidity and pricing there can vary. Check current RBI notifications for the exact redemption windows before planning an early exit.