Which one is better ?
SGBs are issued by the RBI on behalf of Indian Government. On other side, Gold ETFs are mutual fund units that are traded on the stock exchange. ETFs and SGBs both are investments of gold without buying physical gold.
SGBs have a tenure of 8 years, with an exit option after the 5th year. Gold ETFs have no fixed tenure it can be bought and sold on the exchange anytime.
Gold ETFs are more liquid than SGBs as they can be bought and sold on the stock exchange. SGBs can be traded on the stock exchange but have lower liquidity.
Minimum investment in SGBs is 1 gm of gold, while in Gold ETFs is one unit. SGBs offer an interest rate of around 2.5% per annum and Gold ETFs do not offer any interest, but offer good return with low equity risk.