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In this section we have included complete comparison guide in table format for gold investment. With this we can conclude buying SGB is the best investment options compare to gold ETF and physical gold as you get all the advantages from both the options + additional 2.5% interest income on your investment. You can use SGB for Collateral against Loan also.
| Points | Physical Gold | Gold ETF | Sovereign Gold Bond |
|---|---|---|---|
| Returns | Lower than actual return on gold | Lower than actual return on gold | Higher than actual return on gold |
| Extra Returns | No | No | Interest of 2.5% on the initial investment |
| Safety | Risk of handling physical gold | High | High |
| Maximum Quantity | No Limit | No Limit | 4 kg for individual, 4 kg for HUF, and 20 kg for trusts and similar entities per fiscal (April-March). |
| Purity of Gold | Purity of Gold always remains a question | High as it is in Electronic Form | High as it is in Electronic Form |
| Capital Gain | Long term capital gain applicable after 3 years | Long term capital gain applicable after 3 years | Long term capital gain applicable after 3 years. ( No Capital gain tax if held till maturity ) |
| Collateral against Loan | Yes | No | Yes |
| Tradability / Exit Route | Conditional | Tradable on Exchange | Tradable on Exchange. Redemption- 5th year onwards with GoI |
| Storage Cost | High | Very Low | Very Low |
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Zerodha Trade@20
