SGB Interest Calculation

This guide explains how Sovereign Gold Bond (SGB) interest is calculated as per RBI rules. SGBs offer a fixed annual interest in addition to gold price appreciation.

To calculate total returns including maturity value, use the SGB Calculator.

SGB Interest Rate

Sovereign Gold Bonds carry a fixed interest rate of 2.5% per annum, calculated on the issue price of the bond.

Interest is paid semi-annually (twice a year) and credited directly to the investor’s bank account.

How to Calculate SGB Interest

The interest on SGB is calculated using the following formula:

Annual Interest = Issue Price × Number of Units × 2.5%

SGB Interest Calculation Example

Suppose you purchased 10 grams of SGB at an issue price of ₹5,000 per gram.

Over 8 years, total interest earned would be ₹10,000 (excluding gold price appreciation).

SGB Interest Payment Dates

Interest on SGBs is paid every six months from the date of issue. Payment dates depend on the specific SGB series.

Tax on SGB Interest

Interest earned on Sovereign Gold Bonds is taxable as per the investor’s income tax slab. There is no TDS deducted at source.

Frequently Asked Questions

Is SGB interest guaranteed?
Yes, the 2.5% annual interest is fixed and guaranteed by the Government of India.
Is SGB interest paid on market value?
No, interest is calculated on the issue price, not the current market value.
Does SGB interest continue after maturity?
No, interest is paid only until the maturity or redemption of the bond.

Also Read :
SGB Return Calculator
SGB Interest Calculation
SGB Redemption Value
SGB vs Gold ETF