SGB premature exit today: Investors set to gain 4x in 5 years as RBI announces SGB 2019–20 Series I redemption price

Representative image

RBI has announced the premature redemption price for the Sovereign Gold Bond (SGB) 2019–20 Series I, and the numbers are eye-popping. This tranche—issued in June 2019—has now completed its five-year lock-in, and those opting for early exit on December 11, 2025 will walk away with returns most investments can only dream of.

The RBI has fixed the redemption price at Rs 12,801 per unit, based on the simple average of 999-purity gold prices published by IBJA for December 8, 9 and 10.

This is a huge leap from the issue price of Rs 3,119 per unit, giving investors a gain of Rs 9,682 per unit—a stunning return of over 210% in just five and a half years, excluding the 2.5% annual interest payouts.

To understand better, a Rs 1 lakh investment in this SGB would have fetched about 32 units in 2019. On December 11, those units will be worth roughly Rs 4.09 lakh, turning the investor’s money into 4x, with interest income over the years coming in as an added bonus.

SGBs have an 8-year tenure, but investors are allowed to exit early starting the 5th year—only on the dates when semi-annual interest is paid. Premature redemption must be initiated through the investor’s bank, post office, or agent from whom the bond was purchased, typically with a request submitted several days in advance.

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.

If you want to invest in Sovereign Gold Bonds, all you need is to purchase Sovereign Gold Bond from either a bank, SHCIL or designated post offices. For offline purchases, an SGB certificate from the holding of the issuing bank or designated post offices is issued. You can collect it. In case you have purchased an SGB online, your demat account portfolio will reflect. The SGBs offer an interest of 2.5% per annum.

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.