Shares as Margin (SAM) in ETFs
What is difference between Sovereign Gold Bonds and Gold ETFs
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Features
Sovereign Gold Bond
Gold ETF
Issuer
Government of India
Fund houses/ Asset Management companies
Form
Government security denominated in grams of gold
Open-ended mutual funds schemes (Tracking Gold prices)
Tenure
8years (exit option after 5th year)
No fixed tenure
Interest rate
Fixed: 2.5%p.a (semi-annual pay out)
No interest
Returns
Linked to gold price+ Interest
Linked to gold price
Liquidity
Limited, can be traded on exchanges but not very liquid
Highly liquid; tradable on stock exchanges during market hours
Taxation
Capital gains tax exempt if held to maturity: Interest income taxable
Subject to capital gains tax
Key Advantage
Tax free capital gains on maturity and fixed interest
High liquidity and no lock -in period