SGB 2018-19 Series-I Premature Redemption Price Announced - Know Whether Investors Should Redeem Or Not

SGB 2018-19 Series-I: The Reserve Bank of India has announced the premature redemption price for Sovereign Gold Bond (SGB) investors who invested in the SGB 2018-19 Series-I bond. The redemption date for SGB 2018-19 Series-I is November 4.

Notably, the SGB scheme was launched in November 2015. The scheme sought to offer investors an option to invest in gold other than the traditional method of purchasing the precious metal in physical form. SGBs were issued by the RBI on behalf of the government. The scheme was introduced to lower India's reliance on imported physical gold, reduce hoarding of physical gold and turn domestic savings into robust financial assets.

SGB 2018-19 Series-I Redemption Price

RBI has fixed the price for premature redemption at Rs 12,039 per unit for each gram of gold invested. SGBs have a fixed eight-year maturity tenure. However, investors are allowed to redeem their investment prior to the redemption date. Investors can redeem their SGBs prematurely only after five years from the date of investment. Notably, the redemption can only be made on the interest payment dates announced by the RBI.

How Much Money Can SGB 2018-19 Series-I Investors Make

The SGB 2018-19 Series-I was issued on May 4, 2018. The issue was conducted at Rs 3,114 per gram. Given the redemption price announced by RBI of Rs 12,039 per gram, SGB investors are set to make a minimum profit of 286.6 per cent or Rs 8,925 for every gram purchased. Along with the returns earned upon redemption, SGB investors would have also earned money in the form of an additional 2.5 per cent annual interest paid to SGB holders.

Notably, the redemption price for SGBs is tied to the price of gold. As per RBI's notification, the redemption price is determined by calculating the simple average of the closing price of gold of 999 purity declared by the India Bullion and Jewellers Association (IBJA) in the last three business days prior to the redemption date. Thus the redemption price for SGB 2018-19 Series-I was calculated on the basis of 999 gold prices from October 30, October 31, and November 3, 2025.

What Should SGB Investors Do?

Gold prices rallied in 2025 because of a strong demand for safe-haven assets, touching fresh all-time highs ahead of the festive season. However, gold prices witnessed some moderation post the festive season. Prathamesh Mallya, Deputy Vice President Research - Non Agri Commodities and Currencies at Angel One Ltd told Outlook Money that SGB 2018-19 Series-I can consider booking profits based on the premature redemption price as the returns offered are handsome.

"At the current redemption prices of around Rs 12,039 per gram, investors will make an astounding absolute return of around 287 per cent over a time frame of seven years. It's a handsome return and investors should look to take the profits off the table, even though it's a premature redemption," Mallya said.

Mallya added that those investors who do not wish to book profits at current levels can consider waiting till the redemption date, as doing so can help them benefit from the tax-exemption offered for SGBs held till maturity.

"Those who don't have the desire to take the profits at current levels can wait till redemption, as they can enjoy the benefits of taxation on the capital appreciation. All capital gains from holding SGBs until the eight-year maturity date are exempt from tax for individual investors. If you redeem SGBs with the RBI after five years, the capital gains are also exempt from tax, as redemption is not considered a "transfer" under tax law," Mallya said.

Outlook For Gold Prices

Despite recent price corrections, Mallya remained bullish on gold and mentioned that the US government shutdown and the possibility of interest rate cuts in the future make gold an asset which can be considered for long-term returns.

"Trade tensions between the US-China and the US-India seem to have eased in recent weeks, and hence, gold prices have corrected from the recent highs. Gold prices in the international markets have corrected by almost 10 per cent from the highs of $4391/ounce to around $3977/ounce as of November 4 2025. The underlying tone and the structural set-up still favour gold as a safe haven asset, and with the US government shutdown and the possibility of interest rate cuts in December, gold is the ultimate bet in the long term," Mallya said.

Mallya added that typically it is advised that investors should allocate 10 per cent of their total portfolio size towards gold. However, he added that investors can consider increasing their exposure to the yellow metal to 15 per cent amid looming uncertainties. He added that this additional exposure can be achieved through investment in Gold Exchange Traded Funds (ETFs), gold mutual funds and physical gold.

"In general economic conditions, it is advisable to have at-least 10 per cent of your portfolio allocation towards gold. In the present macro-economic environment of tariffs uncertainty, US government shutdown, interest rate cuts possibility, it is advisable to increase your allocation to around 15 per cent in one's portfolio. Since new SGB issues are closed, other avenues for investors to allocate their exposure can be in gold ETF's, Gold Mutual Funds," Mallya said.

Aksha Kamboj, Vice President, India Bullion & Jewellers Association (IBJA) told Outlook Money that buyers can consider ‘modest’ buying and increase their exposure to gold. However, she also added that investors who are willing to delay their purchase can consider waiting for further corrections and a better entry point.

“With macro uncertainty persisting but safe-haven demand declining, it might be reasonable to add some modest exposure to gold through diversifications besides SGBs, including gold-ETFs or bullion-linked funds. However, with gold possibly entering a corrective phase in the short term, waiting for a better entry point might better position a risk-reward trade-off compared to a wholesale tactic now," Kamboj said.