Indian Sovereign Gold Bonds: Interest Payments dates and the End of New Issues

The Indian Sovereign Gold Bond (SGB) scheme has been one of the government’s most successful financial instruments for gold investors in recent years. As the government has recently announced the cessation of new SGB issuances, it’s important for existing and potential investors to understand how the interest payment structure works and what this change means for the gold bond market.

Understanding SGB Interest Payments

Sovereign Gold Bonds stand out from physical gold and other gold-related investments primarily because they pay a fixed interest rate to bondholders. Here’s how the interest payment system works:

• Fixed Interest Rate: SGBs pay a fixed annual interest rate of 2.50% on the initial investment amount.
• Semi-annual Payments: Interest is credited to the investor’s account twice a year, typically every six months from the date of issue.
• Interest Payment Dates: Each SGB series has its own specific interest payment dates based on its issuance date. For example, if an SGB was issued on January 15, 2023, the interest payment dates would fall on July 15 and January 15 each year until maturity.
• Calculation Method: Interest is calculated on the nominal value of the investment, not on the current market value of gold.
• Tax Benefits: The interest earned on SGBs is taxable under the Income Tax Act, but the capital gains at redemption are exempt from tax for individual investors.

Tracking Your SGB Interest Payment Dates

To know exactly when your SGB interest will be credited:

1. Check your bond certificate or statement for the issue date
2. Mark your calendar for dates that fall exactly 6 months apart from the issue date
3. Interest is typically credited to the registered bank account directly
4. Investors can also check their Demat account statement or contact their bank for confirmation

SGB interest payout dates

Series Name	Face Value	NSE Code	BSE Code	Coupon Rate (%)	Redemption Date	Int. Amt. per 6 Month	Interest Payment Dates
2023-24 Series IV	6263	SGBFEB32IV	SGBFEB32	2.5	21-02-32	78.29	21 Aug & 21 Feb
2023-24, Series III	6199	SGBDE31III	SGBDEC31	2.5	28-12-31	77.49	28 Jun & 28 Dec
2023-24, Series II	5923	SGBSEP31II	SGBSEP31	2.5	20-09-31	74.04	20 Mar & 20 Sep
2023-24, Series I	5926	SGBJUN31I	SGBJUNE31	2.5	27-06-31	74.06	27 Dec & 27 Jun
2022-23, Series IV	5611	SGBMAR31IV	SGBMAR31	2.5	14-03-31	70.14	14 Mar & 14 Sep
2022-23, Series III	5409	SGBDE30III	SGBDEC30	2.5	27-12-30	67.62	27 Dec & 27 Jun
2022-23, Series II	5197	SGBAUG30	SGBAUG30	2.5	30-08-30	64.97	30 Aug & 30 Feb
2022-23, Series I	5091	SGBJUN30	SGBJUNE30	2.5	28-06-30	63.64	28 Jun & 28 Dec
2021-22, Series X	5109	SGBMAR30X	SGBMARCH30	2.5	08-03-30	63.87	08 Mar & 08 Sep
2021-22, Series IX	4786	SGBJAN30IX	SGBJAN30	2.5	18-01-30	59.83	18 Jan & 18 Jul
2021-22, Series VIII	4791	SGBD29VIII	SGBDEC29	2.5	07-12-29	59.89	7 Dec & 7 Jun
2021-22, Series VII	4761	SGBNV29VII	SGBNOV29	2.5	02-11-29	59.52	2 Nov & 2 May
2021-22, Series VI	4732	SGBSEP29VI	SGBSEP29	2.5	07-09-29	59.15	7 Sep & 7 Mar
2021-22, Series V	4790	SGBAUG29V	SGBAUG29	2.5	17-08-29	59.88	17 Aug & 17 Feb
2021-22, Series IV	4807	SGBJUL29IV	SGBJUN29B	2.5	20-07-29	60.09	20 Jul & 20 Jan
2021-22, Series III	4889	SGBJU29III	SGBJUNE29A	2.5	08-06-29	61.11	8 Jun & 8 Dec
2021-22, Series II	4842	SGBJUN29II	SGBJUNE29	2.5	01-06-29	60.53	1 Jun & 1 Dec
2021-22, Series I	4777	SGBMAY29I	SGBMAY29	2.5	25-05-29	59.72	25 May & 25 Nov
2020-21, Series XII	4662	SGBMR29XII	SGBMAR29	2.5	09-03-29	58.28	9 Mar & 9 Sep
2020-21, Series XI	4912	SGBFEB29XI	SGBFEB29	2.5	09-02-29	61.4	9 Feb & 9 Aug
2020-21, Series X	5104	SGBJAN29X	SGBJAN29A	2.5	19-01-29	63.8	19 Jan & 19 Jul
2020-21, Series IX	5000	SGBJAN29IX	SGBJAN29	2.5	05-01-29	62.5	5 Jan & 5 Jul
2020-21, Series VIII	5177	SGBN28VIII	SGBNOV28	2.5	18-11-28	64.72	18 Nov & 18 May
2020-21, Series VII	5051	SGBOC28VII	SGBOCT28	2.5	20-10-28	63.14	20 Oct & 20 Apr
2020-21, Series VI	5117	SGBSEP28VI	SGBSEP28	2.5	08-09-28	63.97	8 Sep & 8 Mar
2020-21, Series V	5334	SGBAUG28V	SGBAUG28	2.5	11-08-28	66.68	11 Aug & 11 Feb
2020-21, Series IV	4852	SGBJUL28IV	SGBJULY28	2.5	14-07-28	60.65	14 Jul & 14 Jan
2020-21, Series III	4677	SGBJUN28	SGBJUN28	2.5	16-06-28	58.47	16 Jun & 16 Dec
2020-21, Series II	4590	SGBMAY28	SGBMAY28	2.5	19-05-28	57.38	19 May & 19 Nov
2020-21, Series I	4639	SGBAPR28I	SGBAPR28	2.5	28-04-28	57.99	28 Apr & 28 Oct
2019-20 Series X	4260	SGBMAR28X	SGBMAR28	2.5	11-03-28	53.25	11 Mar & 11 Sep
2019-20 Series IX	4070	SGBFEB28IX	SGBFEB28	2.5	11-02-28	50.88	11 Feb & 11 Aug
2019-20 Series VIII	4016	SGBJ28VIII	SGBJAN28	2.5	21-01-28	50.2	21 Jan & 21 Jul
2019-20 Series VII	3795	SGBDC27VII	SGBDEC27	2.5	10-12-27	47.44	10 Dec & 10 Jun
2019-20 Series VI	3835	SGBOCT27VI	SGBOCT27A	2.5	30-10-27	47.94	30 Oct & 30 Apr
2019-20 Series V	3788	SGBOCT27	SGBOCT27	2.5	15-10-27	47.35	15 Oct & 15 Apr
2019-20 Series IV	3890	SGBSEP27	SGBSEP27	2.5	17-09-27	48.63	17 Sep & 17 Mar
2019-20 Series III	3499	SGBAUG27	SGBAUG27	2.5	14-08-27	43.74	14 Aug & 14 Feb
2019-20 Series II	3443	SGBJUL27	SGBJULY27	2.5	16-07-27	43.04	16 Jul & 16 Jan
2019-20 Series I	3196	SGBJUN27	SGBJUNE27	2.5	11-06-27	39.95	11 Jun & 11 Dec
2018-19 Series VI	3326	SGBFEB27	SGBFEB27	2.5	12-02-27	41.58	12 Feb & 12 Aug
2018-19 Series V	3214	SGBJAN27	SGBJAN27	2.5	22-01-27	40.18	22 Jan & 22 Jul
2018-19 Series IV	3119	SGBDEC26	SGBDEC26	2.5	01-01-27	38.99	1 Jan & 1 Jul
2018-19 Series III	3183	SGBNOV26	SGBNOV26	2.5	13-11-26	39.79	13 Nov & 13 May
2018-19 Series II	3146	SGBOCT26	SGBOCT26	2.5	23-10-26	39.33	23 Oct & 23 Apr
2018-19 Series I	3114	SGBMAY26	SGBMAY26	2.5	04-05-26	38.93	4 May & 4 Nov
2017-18 Series XIV	2881	SGBJAN26	SGBJAN26	2.5	01-01-26	36.02	1 Jan & 1 Jul
2017-18 Series XIII	2866	SGBDEC2513	SGBDEC25C	2.5	26-12-25	35.83	26 Dec & 26 Jun
2017-18 Series XII	2890	SGBDEC2512	SGBDEC25B	2.5	18-12-25	36.13	18 Dec & 18 Jun
2017-18 Series XI	2952	SGBDEC25XI	SGBDEC25A	2.5	11-12-25	36.9	11 Dec & 11 Jun
2017-18 Series X	2961	SGBDEC25	SGBDEC25	2.5	04-12-25	37.02	4 Dec & 4 Jun
2017-18 Series IX	2964	SGBNOV25IX	SGBNOV25C	2.5	27-11-25	37.05	27 Nov & 27 May
2017-18 Series VIII	2961	SGBNOV258	SGBNOV25B	2.5	20-11-25	37.02	20 Nov & 20 May
2017-18 Series VII	2934	SGBNOV25	SGBNOV25A	2.5	13-11-25	36.68	13 Nov & 13 May
2017-18 Series VI	2945	SGBNOV25VI	SGBNOV25	2.5	06-11-25	36.82	6 Nov & 6 May
2017-18 Series V	2971	SGBOCT25V	SGBOCT25B	2.5	30-10-25	37.14	30 Oct & 30 Apr
2017-18 Series IV	2987	SGBOCT25IV	SGBOCT25	2.5	23-10-25	37.34	23 Oct & 23 Apr
2017-18 Series III	2956	SGBOCT25	SGBOCT25A	2.5	16-10-25	36.95	16 Oct & 16 Apr
2017-18 Series II	2830	SGBJUL25	SGBJULY25	2.5	28-07-25	35.38	28 Jul & 28 Jan
2017-18 Series I	2951	SGBMAY25	SGBMAY25	2.5	12-05-25	36.89	12 May & 12 Nov
2016-17 Series IV	2943	SGBMAR25	SGB2016IV	2.5	17-03-25	36.79	17 Mar & 17 Sep
2016-17 Series III	3007	SGBNOV24	SGB2016IIIA	2.5	17-11-24	37.59	17 Nov & 17 May
2016-17 Series II	3150	SGBSEP24	SGB2016IIA	2.75	23-09-24	43.32	23 Sep & 23 Mar
2016-17 Series I	3119	SGBAUG24	SGBAUG24	2.75	05-08-24	42.89	5 Aug & 5 Feb
2015-16 Series III	2916	SGBMAR24	SGB2016II	2.75	29-03-24	40.1	29 Mar & 29 Sep
2015-16 Series II	2600	SGBFEB24	SGB2016I	2.75	08-02-24	35.75	8 Feb & 8 Aug
2015-16 Series I	2684	SGBNOV23	SGB20151	2.75	26-11-23	36.91	26 Nov & 26 May

Government’s Decision to Stop SGB Issuance

In a significant policy shift, the Indian government has recently announced that it will stop issuing new Sovereign Gold Bonds. This decision comes after several years of successful implementation of the scheme, which was launched in 2015.

Reasons Behind the Decision

The government’s decision appears to be based on several factors:

• Adequate Gold Reserves: Having accumulated substantial gold through the SGB scheme over the years
• Shift in Monetary Policy: Focusing on other financial instruments to manage public debt
• Market Dynamics: Evolving gold market conditions and alternative investment products
• Budget Considerations: Reassessing government liabilities and fiscal objectives

Impact on Existing SGBs and Investors

For current SGB holders, this development has several implications:

• Existing Bonds Remain Valid: All previously issued SGBs continue to be valid and will honor their 8-year maturity terms
• Interest Payments Continue: The government will continue to pay the promised 2.50% interest until maturity for all outstanding bonds
• Potential Premium Value: With no new issuances, existing SGBs may trade at a premium on the secondary market
• Limited Exit Options: Early exit remains available through stock exchanges after the 5-year lock-in period

Investment Alternatives After SGB Discontinuation

With the SGB scheme coming to an end, gold investors can consider these alternatives:

• Gold ETFs: Exchange-traded funds that track gold prices without physical ownership
• Digital Gold: Online platforms allowing purchase of digital gold backed by physical gold
• Gold Mutual Funds: Professionally managed funds investing in gold and gold-related securities
• Physical Gold: Traditional investment in gold jewelry, coins, or bars (though storage and purity concerns remain)

Conclusion

The cessation of new SGB issuances marks the end of an era for one of India’s most innovative gold investment options. While existing bondholders will continue to enjoy interest payments and tax benefits until maturity, new investors will need to explore alternative gold investment vehicles.

For current SGB holders, it’s worth keeping track of your specific interest payment dates and considering the potential premium value your bonds might command in the secondary market as the supply becomes permanently fixed.

As the gold investment landscape evolves in India, investors should stay informed about their options and make choices aligned with their financial goals, risk tolerance, and investment horizon.

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This blog post is for informational purposes only and does not constitute financial or investment advice. Always conduct thorough research and consider consulting with professional advisors before making investment or funding decisions.