Sovereign Gold Bonds: RBI announces early redemption for another SGB series; investors to get 183% return

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Days after the SGB 2020-21 Series VI and SGB 2019-20 Series X, the Reserve Bank of India (RBI) has announced the early redemption price for the Sovereign Gold Bond (SGB) 2019-20 Series-IV-Issue date September 17, 2019.

As per the Government of India notification, investors can exercise the option of early redemption after the fifth year from the date of issue, but only on interest payment dates.

The redemption price for the tranche has been fixed at Rs 11,003 per unit. This is based on the simple average of closing gold prices of 999 purity, published by the India Bullion and Jewellers Association Ltd. (IBJA), for the three business days of September 12, 15, and 16, 2025.

Interestingly, SGBs have an eight-year fixed term, but investors have the option to leave early. According to RBI regulations, SGB premature redemption is permitted only after the fifth year has passed after the bonds' issuance date.

Subscriptions for this 2019–20 Series-IV-Issue tranche were accepted from September 9–September 13, 2019. September 17, 2019 was the date of the bonds' issuance.

Returns snapshot

• Issue Price (2019): Rs 3,890 per gram
• Redemption Price (2025): Rs 11,003 per gram
• Absolute Return (excl. interest): Rs 7,113 per unit
• Absolute Gain: Nearly 183% in 6 years

• Apart from price appreciation, SGBs also offer 2.5% fixed annual interest on the initial investment.
• Interest is paid semi-annually and the last installment is added at maturity.

• No storage costs or risks (unlike physical gold).
• Assured market-linked value at maturity.
• Free from making charges and purity concerns.
• Safely held in RBI records or demat form.