287% absolute return in SGB: RBI announces redemption price for the Sovereign Gold Bond 2018-19 Series-I; check details

Representative image

The Reserve Bank of India (RBI) has announced the redemption price for the Sovereign Gold Bond (SGB) 2018-19 Series-I, which is due for premature redemption on November 4, 2025. Investors will receive Rs 12,039 per unit for each gram of gold invested in this tranche.

When can investors redeem early?

While SGBs have an eight-year maturity period, the government allows premature redemption from the fifth year onward, but only on interest payment dates. For the 2018-19 Series-I, this early exit opportunity falls on November 4, 2025.

How much investors earned over seven years

The 2018-19 Series-I was issued on May 4, 2018, at a price of Rs3,114 per gram. With the current redemption price set at Rs12,039, investors will make an impressive absolute return of around 287% over seven years.

When compared to traditional gold investments, SGBs have delivered significantly higher overall returns — not only due to the rise in gold prices but also because investors earned an additional 2.5% annual interest (taxable) on their initial investment value.

How the redemption price is calculated

The redemption price for Sovereign Gold Bonds is linked directly to gold prices in the domestic market. According to RBI’s notification, the price is based on the simple average of the closing price of gold of 999 purity published by the India Bullion and Jewellers Association (IBJA) over the last three business days before redemption.

For this tranche, the average was calculated using gold prices from October 30, October 31, and November 3, 2025, resulting in the redemption rate of Rs 12,039 per gram.

What is the Sovereign Gold Bonds scheme?

SGB Scheme was introduced by the Indian government in November, 2025 as an alternative to attract gold ownership. The bonds were issued by the RBI for and on behalf of the Centre. The bonds denominated in grams of gold offered investors dual benefit-- earning a fixed annual interest of 2.5% on the issue price and earning capital appreciation linked to gold prices. The scheme majorly aimed to reduce India’s reliability on imported physical gold, curb hoarding, and channel household savings into financial assets.

The bonds have a fixed term of eight years, but investors can exit after five years on interest payment dates if they wish. SGBs can also be traded on stock exchanges, transferred to others, or used as collateral for loans.

What is the tax treatment of Sovereign Gold Bonds

As per the provisions of the Income-tax Act, 1961 (Section 43 of 1961) the interest on the SGBs is taxable. When an individual redeems these bonds, they are free from paying capital gains tax. Any capital gains that result from the transfer of the bonds on the exchange will be eligible for the indexation benefits.