What are the main differences between Sovereign Gold Bonds (SGBs) and physical gold?

• Earnings on Sovereign Gold Bonds (SGBs) are comparatively higher than the actual return from physical gold, as physical gold has additional making and wastage charges.

• Physical golds are highly liquid, whereas SGBs are mainly used for long-term benefits.

• Buying SGBs is very safe, as it is issued by the RBI, whereas for buying physical gold, buyers have to be very concerned with purity and valid invoices.

• Physical golds are difficult to store, and the risk of theft is always there, while SGBs come in a DEMAT or electronic form.

• The earnings from the sale of physical gold are subject to capital gains tax, whereas there is no tax on the maturity of SGBs.

• Real gold can be purchased on the spot, but SGBs have a time restriction set by the government.