Which SGB to buy to get maximum Interest? How interest is calculated on SGB? I Investment Ideas by APDaga

Which SGB to buy to get maximum Interest? How interest is calculated on SGB? I Investment Ideas by APDaga
We have already talked about SGB in our older posts and videos. From all those we got the idea about why we should invest in gold? 

Once you decide to invest in gold then SGB is the best option available for you to invest in gold. 

If you are visiting here for the first time and you are unaware of SGB and you have questions like... 
  • What is SGB? 
  • Why it is best?
  • What are its advantages over other types of gold investments?
  • and many similar questions... 

then visit the below links for the answers:
After reading the above articles, if you have decided to invest in SGB. then this article will help you to choose the best SGB in order to get the maximum interest on SGB.

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Short Video :

How interest is calculated on SGB?

  • As I told you in my previous post, SGB is issued by RBI at a particular issue price.

  • You are already aware that you get 2.5% interest on the SGB. That 2.5% interest is calculated on the issue price of that SGB. (Not on your buying price, Not on the current price of the SGB, But on the Issue Price of the SGB)

Which SGB to buy to get maximum Interest?

  • So, In order to get maximum interest, you should select the SGB having maximum issue price.

  • As per my knowledge, SGB issued on Aug 2020 had a maximum issue price to date. and that is INR 5300 per 1 gm of gold.

  • You can buy the Aug 2020 issue to get an Interest amount of Rs. 1325 per annum of 10 gms of SGB.

How to buy Aug 2020 SGB issue now?

  • As I mentioned in my last post, the SGB name is made up of SGB<maturity month name><2 digit maturity year>. and SGB is an 8-year bond.

  • So, as per that understanding, Aug 2020 SGB issue is named as "SGBAUG28"

  • Go to your Demat > Search for "SGBAUG28" and buy it.

  • Hurray, You got it!!! It's that simple.

Important Note:

If you are visiting this article after a very long time after the publish date, then there might be chances that some other SGB exists with a higher issue price than Aug 2020 SGB issue.
In that case, you just have to google search for the SGB list with their issue prices and select the one with a higher issue price.

Get your concepts clear and start investing... 
If you have any doubt about investing, feel free to drop it in the comment box below. I will try my best to help you and smoothen your investment journey. 

Thank you,
Akshay P Daga
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