What is the advantage of Sovereign Gold Bond over Physical gold and Gold ETF?

Comparison of buying Physical gold, Gold ETF and Sovereign Gold Bond for investment

In this section we have included complete comparison guide in table format for gold investment. With this we can conclude buying SGB is the best investment options compare to gold ETF and physical gold as you get all the advantages from both the options + additional 2.5% interest income on your investment. You can use SGB for Collateral against Loan also.

Points	Physical Gold	Gold ETF	Sovereign Gold Bond
Returns	Lower than actual return on gold	Lower than actual return on gold	Higher than actual return on gold
Extra Returns	No	No	Interest of 2.5% on the initial investment
Safety	Risk of handling physical gold	High	High
Maximum Quantity	No Limit	No Limit	4 kg for individual, 4 kg for HUF, and 20 kg for trusts and similar entities per fiscal (April-March).
Purity of Gold	Purity of Gold always remains a question	High as it is in Electronic Form	High as it is in Electronic Form
Capital Gain	Long term capital gain applicable after 3 years	Long term capital gain applicable after 3 years	Long term capital gain applicable after 3 years. ( No Capital gain tax if held till maturity )
Collateral against Loan	Yes	No	Yes
Tradability / Exit Route	Conditional	Tradable on Exchange	Tradable on Exchange. Redemption- 5th year onwards with GoI
Storage Cost	High	Very Low	Very Low