The Reserve Bank of India (RBI) has announced that investors in Sovereign Gold Bonds (SGB) 2019-20 Series-IX and 2020-21 Series-V can opt for premature redemption on August 11, 2025, at Rs 10,070 per unit.These government-backed bonds, with an eight-year tenure, allow early redemption only after the fifth year from the date of issue and exclusively on interest payout dates, according to an ET report. The most recent SGB tranche—SGB 2023-24 Series IV—was issued in February 2024.What it means for youIf you invested in the SGB 2019-20 Series-IX in September 2019 at Rs 4,070 per gram, your premature redemption will yield an absolute gain of Rs 6,000 per unit—about 147%—excluding the 2.5% annual interest. Investors in the SGB 2020-21 Series-V, issued in August 2020 at Rs 5,334 per gram, will earn an 89% absolute return, or Rs 4,736 per unit, excluding interest.On top of these capital gains, the bonds pay a fixed 2.5% interest annually, credited semi-annually to your bank account. The final interest instalment is paid along with principal on maturity.How the redemption price is calculatedAccording to the RBI’s August 8 press release, the price is based on the simple average of closing gold prices (999 purity) over the three business days before redemption—August 6, 7 and 8—published by the India Bullion and Jewellers Association Ltd (IBJA).What you need to do now
- Check your SGB tranche and issue date to confirm eligibility.
- Submit your redemption request before the deadline mentioned in the RBI schedule.
- Remember: the bonds are also tradable, transferable and can be pledged as collateral.
The SGB scheme offers a safe alternative to physical gold, removing storage and purity concerns while delivering steady interest income and potential price appreciation
