What is the difference between SGBs, Gold ETFs and Physical Gold?
| Particulars | SGB | Gold ETF | Physical Gold |
|---|---|---|---|
| Safety | High | High | Risk of theft, wear and tear |
| Returns | More than actual return on gold. | Less than actual return on gold. | Lower than the real return on gold due to making charges. |
| Tradability | Tradeable on the stock exchanges if held in demat form. Or else, can be prematurely redeemed from the 5th year of issue. | Tradeable on stock exchanges. | Restrictive |
| Trading Margin Collateral | Accepted (cash equivalent collateral) | Accepted (non-cash equivalent collateral) | Not accepted |
| Loan Collateral | Accepted | Not accepted | Accepted |
| Gains | * STCG if held for less than 3 years. | * STCG if held for less than 3 years. * LTCG if held for more than 3 years. | * STCG if held for less than 3 years. * LTCG if held for more than 3 years. |
| Storage Cost | Minimal | Minimal | High |
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