How is interest on SGB calculated and paid?
Sovereign Gold Bonds (SGBs) provide investors with a fixed rate of interest in addition to capital appreciation based on the market price of gold. The interest component offers consistent income over the life of the bond.
Interest calculation and payment
- Interest rate: Fixed at 2.50% per annum on the initial investment value.
- Payment frequency: Disbursed semi-annually (twice a year).
- Payment mode: Credited directly to the bank account linked with your Demat account.
Example:
If you invest ₹10,00,000 in an SGB issue:
- Annual interest = ₹10,00,000 × 2.5% = ₹25,000
- Paid as ₹12,500 every six months directly to your bank account
What if...
| Scenario | Resolution |
|---|
| You don’t receive interest | Ensure your bank details are correctly updated in your Demat account. |
| You sell the bond in the secondary market | You forfeit future interest payments post-transfer; the buyer receives them. |
Keep your bank and Demat details current to avoid delays in receiving your semi-annual interest payments.
Last updated: 26 Jun 2025
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