Introduction
GoldBeES and Sovereign Gold Bonds, popularly called SGBs are two forms of investment schemes which can yield returns equivalent to investing in gold commodity.
In this article, we will discuss the two forms investment schemes and why GoldBeES are a better investment than SGBs.
You might also like: What is Gold Monetization Scheme – Earn Money From Physical Gold
Gold as a commodity for investment
Gold is an exchange traded commodity, by which I mean, the prices of gold increases or decreases based on the demand and supply it gets from the market. Despite buying gold in its physical form, there are many other ways by which one can invest in gold.
In this article we will understand the two forms of such investment: GoldBeES and Sovereign Gold Bonds.
What are GoldBeES
GoldBeES are Exchange Traded Funds introduced by Nippon India.
GoldBeES stand for Gold Benchmark Exchange Traded Scheme.
They are exchange traded funds which are valued in 0.01 grams of gold, backed by 99.5% pure physical gold.
Just like mutual funds, they have an Expense Ratio (a small fee paid to the Asset Management Company), but do not levy any making charges, storage fees or insurance cost.
You can know more about GoldBeES by clicking Here
What are Sovereign Gold Bonds (SGB)
Sovereign Gold Bonds, popularly called SGBs are Government securities issued by the Reserve Bank of India.
One unit of SGB is valued for 1 grams of gold, which can be held in a demat or paper form for a maximum tenure of 8 years.
Also Read: Sovereign Gold Bonds: A Better Alternative To Physical Gold Investment
Reasons why GoldBeES are a better investment than SGBs
When there are two forms of investments for the same asset class, there need not be much distinction between choosing the either.
Here are five reasons why GoldBeES are a better investment than Sovereign Gold Bonds:
- High liquidity
- Smaller ticket size
- Easily tradable
- No lock-in period
- No cap on investment
High liquidity
One of the main reasons why GoldBeES are a better investment than Sovereign Gold Bonds is the high liquidity.
High liquidity means these asset classes are frequently traded on the stock exchange, making it easy to buy and sell the GoldBeEs units. GoldBeES are traded on NSE and BSE.
While, SGBs are Debt Securities which are issued twice in a year with a 5 days subscription period and a lock in period of 8 years.
Smaller ticket size
One unit of GoldBeES represent 0.01 gram of Gold. This is equivalent to Rs. 81 (rate of gold as on July 2025). Thus, even investors with small capital can enter the market.
On the other hand, one unit of SGB represent 1 gram of Gold, making the entry point in the multiples of Rs. 8100/- (rate of gold as on July 2025), making small investors tough to enter the market.
Easily tradable
GoldBeES are easily tradable on the stock exchange platforms. Thus, making the buying and selling of the units convenient to the investors.
SGBs are issued twice in a year, with a maturity period of 8 years. Thereby making the entry to investment a little tough.
While the trading of the SGBs are allowed on the stock exchanges, the units can either be sold at a premium of discount as the price of the bond is determined by market forces.
No lock-in period
SGBs come with a lock in period of 8 years, with an early exit allowed after 5 years. This freezes the money in the asset for a prolonged duration.
While, GoldBeES do not come with any lock in period and they can be traded in real time. This improves the liquidity and the investment scheme is available on the true value of gold.
No cap on investment
There is no cap on investment when it comes to investing in GoldBeES. There is no minimum or maximum quantity requirement. One can easily enter the investment as the ticket size is comparatively low.
On the other hand, the maximum cap on investment for SGBs is limited to 4 kgs per individual per year.
Conclusion
| GoldBeES | SGB |
|---|---|
| High liquidity | Low liquidity |
| Small ticket size (Rs. 81/- per unit) | Large ticket size (Rs. 8100/- per unit) |
| Easily tradable | Issued twice a year with a 5 days subscription period |
| No lock-in period | Lock-in period of 8 years, with an early exit of 5 years |
| No cap on investment | Maximum 4 kg per individual per year |
Although GoldBeES and SGBs are backed by the returns of the same commodity, the returns provided will be the same, even though the route selected is different.
This is my personal opinion when it comes to selecting GoldBeES and SGBs. One needs to do thorough analysis and consult a financial advisor before making any investment decision.
You might also like: 5 Reasons Why Bonds Are Better Investment Than Debentures
