Dhanteras 2025 will mark the beginning of Diwali and is traditionally seen as an auspicious day to buy gold. But in 2025, investors are facing a unique dilemma. With Sovereign Gold Bonds (SGBs) trading at a hefty premium, is it really wise to invest in them this festive season? Let’s break it down.
Sovereign Gold Bonds have long been considered one of the smartest ways to invest in gold. Issued by the Reserve Bank of India (RBI), each bond represents one gram of gold and offers a fixed interest rate of 2.5% per annum, which is paid semi-annually until maturity. The maturity period is 8 years, and investors can also benefit from capital appreciation as gold prices rise.
However, SGBs aren’t currently available for fresh subscription. The government discontinued the scheme in the Union Budget 2025, citing rising gold prices and high borrowing costs. New tranches are expected only when SGBs become cost-effective compared to government securities (G-Secs).
That means if you’re looking to buy SGBs this Dhanteras, you’ll have to purchase them on the secondary market, at prevailing market prices.
The issue? SGBs are trading at a steep premium.
For instance, as of October 10, 2025, the IBJA 999 purity gold rate stood at ₹12,173 per gram, while the SGB 2023–24 Series IV (maturing in February 2032) was trading at around ₹16,580 per gram on the NSE, at a premium of over 36%.
Almost all listed SGBs currently command such premiums, which raises an important question: Is it worth paying so much more than the actual gold price?
If you’re planning to hold till maturity, this premium narrows your margin of safety. Should gold prices fail to appreciate significantly, your returns could lag behind. And since SGBs are relatively illiquid (with low trading volumes) exiting before maturity might not be easy.
Instead of paying a premium for SGBs, investors can consider Gold ETFs and Gold Savings Funds, both of which offer a simpler, more flexible, and cost-efficient route to owning gold.
A Gold ETF (Exchange Traded Fund) tracks the domestic price of physical gold and is backed by 0.995 finesse physical gold stored safely in insured vaults by a custodian. These ETFs are listed on exchanges, allowing investors to buy or sell units easily through a Demat account, just like a stock.
Because they directly reflect market gold prices, there’s no premium involved, making them an efficient alternative. When gold prices rise, the ETF’s Net Asset Value (NAV) moves up, and you benefit from the appreciation.
If you don’t have a Demat account, Gold Savings Funds are another option. These are fund-of-fund schemes that invest in underlying Gold ETFs. They can be purchased directly from mutual fund houses, and even through Systematic Investment Plans (SIPs), making gold investing more accessible and disciplined.
Read more: Dhanteras 2025: Date, Muhurat Timings, and Traditions.
As Dhanteras 2025 approaches, investors have multiple ways to participate in gold’s timeless appeal. While SGBs remain a strong long-term instrument backed by sovereign assurance, the current high market premiums make timing crucial.
Alternatives like Gold ETFs and Gold Savings Funds may offer a more flexible and cost-efficient route for those seeking market-linked exposure.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.
Investments in the securities market are subject to market risks. Read all the related documents carefully before investing.
Published on: Oct 10, 2025, 4:24 PM IST
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