Sovereign gold bonds vs Physical gold vs etf vs digital gold vs FD & Overdraft vs gold scehmes

features	SVG Bonds	gold etf / mutual fund	digtal gold	physical gold	FD & Overdraft
objective	tax free + appreaciations +2.5% extra	investement& liquitdity	buying gold in fractions like 10-1000	ornaments pupose	Safety return & emergency fund
Returns	interest rate of 2.5% per annum + capital gains	based on gold rate – maitanenencecharges – tax	gold appreciation -(GST+captial gains +Platform charges)	making charges 20% +GST 3% + capital gains after 3 years	Fixed return (TDS)
lock in period	5–8 years,	no lock in	sell at any time	no lock in	1-10 years
taxation	no tax	taxed at 20% after three years	3% GST on buying & capital gain tax	GST 3% + capital gains after 3 years	TDS 10%
Fees	Brokerage: A commission of 2–3% and a GST of 3% may apply	annual expense ratio of 0.40–0.80%	Platform charges	making charges
Investment limit	individual can invest in SGBs is 4 kg	no upper limit	no upper limit	no upper limit	no upper limit

Gold schemes: 11 months period EMI contracts for obtaining physical gold ornmamets without or discounted making charges.

Loan against gold vs over draft FD vs mutual funds pledge

gold loan for home attracts tax saving under 80c, up to Rs. 2 lakhs on interest paid in a year under Section 24 of the Income Tax Act, 1961 for construction or purchase of residential property.

Gold Price accumulation hihger than FD rate.. FD rates below 2% of inflation rates,

overdraft interest rate 2% higher than your FD rate technically 2% interest rate on your amount.. (that depricate due to inflation) but gold appreficiate due to inflation. FD gives almost equal to inflation – tax 10% . investing gold better than FD. but FD purose emegreny situation and risk free return. gold attracts GST SGB has long term lockin 5-8 years no liquidity. physical gold fear of theft missing and making charges 20% extra +GST.

for loan purpose .. Over draft against FD not a good. its used for emergency situations to escape from personal loan.

loan against loan: attacts 7-8% per annum and gold rate accumaltes better than this you are enjoying technically no interest & locker fees.

What are svg or Sovereign gold bonds ?

Bonds issued by RBI, based on 1 gram gold, those are equal to gold, no GST, and recurring annual interest 2.5% untill the bond gets matured. You can without demat/trading account. At banks or post office, even with small 1gram to 4kg per year.

1 lot = 1 unit/ 1 gram gold worth of 4.5kinr

Recurring income

Annual interest 2.5% paid semi-annually.

Limit for 1 year

Huf/ individual == 4kg / year

Trust= 20kg/year

Tax: capital gain

Short term capital gain tax: within 1 -3 year(tax bracket, income added total income)

long term capital gain tax:10% with indexation benefit.

Maturity period

8 years

selling after 5 years attracts capital gain tax.

selling in secondary market stock exchange

attracts short-term or long term tax .

Sovereign= king (government RBI).

RBI Sovereign Gold Bond scheme

Substitutes for holding physical gold. Investors has to buy, redeem after maturity.

Physical gold vs SGB (Sovereign gold bonds)

Risk & cost of storage is eliminated in SGB.

Assumed market rate at redemption, Bonus

2.5% annual interest but with physical gold no such benefit.

GST: physical gold attracts but SGB. Doesn’t (18% saving)

No TDS.

Risk: loss of capital when market rates decline.

Where to buy Sovereign gold bonds?

at banks, post officees, stock exchange, agents.

for online application ₹50 offer per gram.

Loan on Sovereign gold bonds?

Yes, loan amount same as physical gold.

Trading SVG Bonds?

Tradable after RBI notified date.

Redemption of part holdings also possible as gram.

Is it better idea to buy Sovereign gold bonds instead of physical gold?

GST subsidy and 2.5% annual interest, no fear theft, no locker fees by bank.

However, if you want to wear occasionally, then physical gold is a good choice, but beware theives.

Also know about commodity trading and forex trading in india.

Comparison: Digital Gold vs Gold ETF vs Sovereign Gold Bonds

Criteria	Digital Gold	Gold ETFs	Sovereign Gold Bonds (SGB)
Liquidity	High, can be sold anytime online	High, can be traded on exchanges	Moderate, redeemable after 5 years
Investment Size	Can start with as low as ₹1	Price of one ETF unit (usually 1 gram)	Minimum 1 gram, larger investments preferred
Returns	Linked to gold price	Linked to gold price	Linked to gold price + 2.5% interest
Tax Benefits	None	Capital gains tax on profits	Capital gains tax-free on redemption
Storage	Digital storage by the provider	Demat account	Digital bonds, no physical storage needed
Risk	Platform risk	Market risk	Low risk, backed by government
Ease of Access	High, available on online platforms	Requires Demat and trading account	Available through banks and post offices