SGB Calculator: Calculate SGB returns (2024)

By Team Gullak

Apr 3, 2024

4 min read

Compare SGB vs Gullak Gold+

Select Amount to invest

₹

Select time period

Years

Gold Price Appreciation

GST

Buy - Sell spread

What is the Sovereign Gold Bond Calculator/SGB Calculator?

Gold Sovereign Bond refers to a scheme that allows individuals to invest in gold in a paper form rather than purchasing physical gold. Sovereign Gold Bonds(SGBs) provide 2.5% extra interest on the principal on top of gold price appreciation(historically 11%pa). The interest is credited in a half-yearly manner. They come with a long lock-in period of 8 years. SGBs open up in tranches, approximately 2-3 times a year.

The SGB Calculator is handy for exploring investments in Sovereign Gold Bonds (SGBs). SGB Calculator offers valuable insights into potential returns based on your desired investment horizon and principal amount.

The SGB Calculator is handy for exploring investments in Sovereign Gold Bonds (SGBs).

The long lock-in periods with Sovereign Gold Bonds could be a blocker for many investors. This is where Gullak Gold+ comes in, offering a more flexible alternative, that provides even higher returns than Sovereign gold bonds(SGBs).

Here's how Gullak Gold+ stands out compared to SGBs:

Extra returns: Gullak Gold+ provides investors with extra 5% gold every year(compounded annually), making the cumulative returns from Gold+ as ~16%pa. Whereas, with Sovereign gold bonds investors get extra 2.5% on the principal(simple interest, not compounded) along with gold price appreciation.
Convenience & flexibility: SGBs open in tranches throughout the year, with a lock-in period of 8 years. They can be sold before that but at 6-7% discounted rates. Gold+, on the other hand, doesn’t have a lock-in period. Investors can invest & withdraw anytime without any penalty fee.
Flexibility: Gold+ investments can be withdrawn in both cash(INR) & gold, while SGBs can be withdrawn only in cash.

Let's compare SGB with Gold+ to help you make an informed decision.

Table: SGB vs Gullak Gold+ using the SGB calculator

Feature	Gullak Gold+	SGB(Sovereign Gold Bonds)
Investment Minimum	Starts from just 0.5 grams	Higher commitment with minimum investment starting at 1 gram of gold.
Liquidity	Buy and sell your gold holdings anytime in both gold or cash(INR)	Long-term commitment with a lock-in period of 8 years. Can be sold before that but at 6-7% discount in the secondary market.
Returns	Get gold price appreciation plus a 5% annually in gold grams, giving your investment the potential to outperform SGBs.	Gold price appreciation plus a 2.5% on the principal(simple interest basis)
Convenience	Invest, sell & manage your investments any time	Opens in tranches across the year, can not be withdrawn at convenience

Why use an SGB Calculator?

The SGB calculator is your secret weapon in navigating the world of gold investments. Here's why the SGB calculator should be your go-to companion:

Clarity on Returns: The SGB calculator or SGB Interest Calculator provides a clear picture of your potential returns based on your investment tenure and amount. This transparency empowers you to make informed decisions and plan your finances effectively.
Goal Setting Made Easy: The SGB calculator helps you set realistic goals: saving for a dream vacation, securing your child's education, or building a robust retirement corpus. Align your investments with your goals and watch your wealth flourish.
Comparison is Key: The SGB calculator allows you to compare different gold investment options, including SGBs, physical gold, and Gold+. With the help of the SGB calculator, you can analyse the pros and cons of each option and choose the one that best suits your risk appetite and financial objectives.

How does an SGB Calculator Work?

Using the SGB Calculator is very easy. Simply :

Enter your desired investment amount.
Choose your preferred tenure.
Press the 'Calculate' button.

The formula used by SGB Calculator to calculate the maturity value of Sovereign Gold Bonds is:

Maturity Value=Investment Amount×Current Gold Price×(1+Interest Rate×Number of Years)

The SGB Calculator displays your potential returns, including the interest component and the gold price appreciation. Remember, these are projected returns based on Gold’s historical appreciation per annum, and actual market conditions may play a role.

Concluding Thought on SGB Calculator and Gullak Gold+

Both SGBs and Gullak Gold+ emerge as strategic choices for investment in Gold. If you’re looking at gold as a primary investment vehicle that gives high returns, Gullak Gold+ might be your way to go.

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