There have been a lot of highs and lows with gold prices, and many sovereign-gold-bond investors have just one question in mind: is it better to hold the bond till maturity or sell and earn profits now?
The answer to this question is not as easy as checking the present price of gold. It depends on when the bond was purchased, how much profit you have earned from it, and whether you need the money.
-
Indian Markets Turning Corner After Two Tough Years, Says Sandeep Tandon -
NDTV Profit Ignite 2026: Experts See Opportunity In Equities, Stay Bullish For Long-Term -
Buy Right, Sit Tight Does Not Work for Individual Stocks, Says Dinshaw Irani -
'Worst Is Behind': Quant MF Sees Market Bottom, Flags 'Extreme Euphoria' In Midcaps -
India's Mutual Fund Industry Could Become A $1 Trillion Opportunity, Say Fund Managers -
'Foreign Investors Are Baraatis': Raamdeo Agrawal's Take On LTCG Tax -
Stay Invested Through Market Cycles: Raamdeo Agrawal at NDTV Profit Ignite -
Ramesh Damani Remains Bullish On India For Next 20-30 Years, Sees Bargains Amid Market Weakness -
CAS Came After A Long Consultation Process: SEBI Chairman Tuhin Kanta Pandey AT NDTV PROFIT IGNITE -
Aim To Cut FPI Onboarding Time From Mth To Five Days: SEBI Chairman Tuhin Kanta Pandey AT NDTV PROFI
Why Holding Until Maturity Can Make Sense?
Also Read | Layoffs Are Rising In Tech, But These Skills Are Helping People Unlock Better Pay
One major benefit of investing in an SGB is that you receive a 2.5% annual return on your invested amount, which is paid twice a year. More importantly, if one invests in the SGB and keeps the bond till maturity after 8 years, any gains from redemption are exempt from tax.
This is a good thing for investors who have invested in gold at low prices in the long term. They will keep getting interest while still being subjected to gold prices.
READ | Gold Extends US Midterms Rally Past $4,040, But Palladium Is the Quiet Outperformer. Here's Why
When Selling Early May Be A Better Option?
However, holding until maturity does not always appear to be the best option. If your SGBs have already been giving good returns and there are even better investment options, it will be good to sell out earlier.
SGBs can be sold before maturity on stock exchanges. Just note that the market value can be higher or lower than the actual value of the bond linked to gold. Trading volume can also pose difficulties for sales at the desired price.
Selling SGBs before maturity on the stock exchange is taxable as a capital gain, unlike redemption at maturity by individuals.
What Should Investors Do?
There is no one-size-fits-all answer. If you do not need the money and are comfortable with gold's long-term outlook, holding until maturity may be rewarding. But if your financial goals have changed or you need liquidity, selling early deserves consideration.
Ultimately, don't sell just because gold prices are rising. Make the decision based on your returns, tax implications, and financial goals.
READ | Investing Rs 25,000 In Gold Every Diwali: Its Value In 10, 15, 25 Years
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.
