How is interest on SGB calculated and paid?
SGBs come with a fixed interest rate of 2.50% p.a. based on the initial investment. This interest is disbursed semi-annually directly into the investor's bank account. To illustrate, if Mr. M invests ₹10,00,000 in an SGB issue, he will earn an annual interest of ₹25,000 (2.5% of ₹10,00,000). This amount will be distributed in two instalments every six months to Mr. M's designated bank account.
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