SGB premature redemption today: Investors strike gold, check details of Sovereign Gold Bond 2019-20 Series VII

Representative image

The Reserve Bank of India has announced premature redemption of Sovereign Gold Bond (SGB) 2019-20 Series VII on December 10, 2025, marking the completion of the mandatory five-year lock-in period.

The bond was originally issued on December 10, 2019. The tranche can be exited early only on interest payment dates, as permitted under the Government of India’s 2019 notification on the SGB Scheme.

The RBI has fixed the premature redemption price at Rs 12,827 per unit, based on the simple average of closing prices of 999 purity gold published by the India Bullion and Jewellers Association (IBJA) for December 5, 8, and 9, 2025.

The amount will be credited directly to the bank accounts of eligible investors by the RBI. The SGB programme continues to deliver strong returns, with this tranche also offering sizeable gains over its issue price.

Investors set to receive massive gains 

Investors of the Sovereign Gold Bond (SGB) 2019-20 Series VII are set to book strong gains as the RBI has fixed the premature redemption price at Rs 12,827 per unit for December 10, 2025. Since the bond was issued at Rs 3,795 per gram in December 2019, investors will earn a capital gain of Rs9,032 per gram — translating into a return of around 238% over six years. For those who subscribed digitally at the discounted price of Rs 3,745, the gains rise to Rs 9,082 per gram, or roughly 242%. These returns are exclusive of the semi-annual interest paid throughout the holding period, making the overall payoff even higher for long-term investors.

 How premature redemption works

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.

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.

How Do Sovereign Gold Bonds Work?

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.

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.