What is Sovereign Gold Bond (SGB)?

SGB is a government bond issued by RBI on behalf of the Government of India. Tenure 8 years. Earns 2.5% annual interest (paid semi-annually) plus full gold price appreciation at maturity. Capital gains at maturity are tax-free (huge benefit over physical gold). Available in tranches roughly 6 times per year. Minimum 1 gram, maximum 4 kg per individual per year.