What happens to my sovereign gold bond at maturity?

Reader’s question: Do I need to sell SGBs at maturity, or will it be credited to my demat? Suppose I buy SGB February 2029; will it mature in 2029 and be credited automatically? Will we get the market price or the price in NSE?

You do not need to do anything at maturity. Sovereign gold bonds, or SGBs, are government-issued bonds that let you invest in gold in paper form. No physical gold, no storage risk. They have a fixed tenure of eight years.

One month before maturity, the RBI notifies investors of the upcoming date. On the date of maturity, the maturity proceeds are credited to the bank account provided by the investor during the application process. The bank account details for repayment will also be mentioned on the SGB certificates. If the bonds were purchased from the secondary market through a trading account and held in dematerialised form, the proceeds would be credited to the bank account linked to the trading account.

What redemption price will you get?

You do not get the NSE price. The NSE price is the market price at which SGBs trade between buyers and sellers during their tenure. It can be higher or lower than the actual gold rate depending on demand. At maturity, the RBI ignores those fluctuations entirely.

Instead, the redemption price is based on the simple average of the closing price of gold of 999 purity for the three business days preceding the maturity date, as published by the India Bullion and Jewellers Association, or IBJA. In short, you get a price closely tied to the actual gold rate, not what the bond was trading at on the exchange.

The 2026 tax update

The tax rules for SGBs changed on April 1, 2026, and the change matters depending on how you bought your bonds.

If you are an original subscriber, meaning you bought directly from the RBI or the government during the initial offer period, and you hold until maturity, your capital gains remain completely tax-free. Nothing has changed for you.

If you bought your SGBs from the secondary market, through the NSE or BSE, the rules have changed. Under the new Budget 2026 rules, capital gains at maturity are no longer tax-exempt for secondary market buyers, even if you held the bonds until the very end.

One thing remains the same for everyone: the fixed interest of 2.5 per cent per annum on the issue price, paid semi-annually, is taxable regardless of how you acquired the bonds.

Is the SGB still worth it?

For original subscribers, it is an easy yes. The tax-free maturity benefit remains intact. But for secondary market buyers, the tax advantage at maturity is gone, which changes the calculus.

That said, SGBs still offer the 2.5 per cent annual interest that no other gold instrument pays, and they eliminate the storage risks and making charges that come with physical gold.

Also read: Is gold a relic or a refuge?

This article was originally published on March 02, 2023, and last updated on April 21, 2026.