Glide Invest FAQ: What is the difference between Sovereign Gold Bonds, Gold ETFs and Gold Mutual Funds?

What is the difference between Sovereign Gold Bonds, Gold ETFs and Gold Mutual Funds?

Jewellery is not viewed as an investment because the sentimental value takes precedent and it is considered for sale only in dire circumstances. Moreover, GST is levied on making charges.

Sovereign Gold Bonds (SGBs) and Gold ETFs, are a low-cost way of taking exposure to gold. Investors do not have to incur making/wastage charges, storage charges (bank locker) or insurance cost. And your investment is backed by gold of 999 purity.

Feature
SGBs
Gold ETFs
Gold MFs
Lock In
5 years
N/A
N/A
Tenor
8 years
N/A
N/A
Return
Fixed interest of 2.5% on initial investment amount is credited to the bank account semi-annually. The redemption price is simple average of gold prices of 3 days prior to maturity/redemption date.
Redemption value based on prevailing gold price. Returns are reflected in the NAV. No fixed interest.
Redemption value based on prevailing gold price. Returns are reflected in the NAV. No fixed interest.
Tax
Interest is taxed as per your income slab.

Held till maturity: Capital gains tax is exempted for individuals.

Sold via exchange before 3 years: Capital gains as per income slab. 

Sold via exchange after 5 years: LTCG tax of 20.8% with indexation.
As per income tax slab if sold before 36 months. 20.8% LTCG tax if sold after 36 months, with indexation.
As per income tax slab if sold before 36 months. 20.8% LTCG tax if sold after 36 months, with indexation.
Discount
Rs 50 per gram less than the nominal value if purchased online.
Not available
Not available
Mode of holding
Demat or Physical
Demat
Demat or Physical
Minimum investment
Rs 4,662 per gram and in multiples
1 unit or 1 gram of gold
1 unit or 1 gram of gold
Maximum investment
Individual and HUF: 4 kg each family member. 

Trusts and similar entities: 20 kg
No limit
No limit
Purchase
Investment can be done through Banks, Stock Holding Corporation of India, post offices/agents.
Demat
Demat or Physical
Tradability
Listed on stock exchanges
Listed on stock exchanges
Listed on stock exchanges
Payment option
Cash (upto Rs 20,000)/cheques/demand draft/electronic fund transfer
Digital mode only
Digital mode only





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