SGB 2018-19 Series-II: Online Investors To Get Over 365% Returns As RBI Fixes Price For Final Redemption

Gold prices have been on a continuous uptrend as of October 23, 2026. Investors who hold gold in their portfolio are likely to have gained from the uptick in prices. However, Sovereign Gold Bond (SGB) investors are set to get a chance to redeem their holdings.

Notably SGBs are securities issued through the Reserve Bank of India (RBI) on behalf of the government which are denominated in grams of gold, with the minimum investment quantity fixed at 1 gram. The bonds come with a sovereign guarantee on both the principal amount (in grams of gold) and the interest payout. The scheme has a maturity of eight years. However, premature redemption is allowed after the fifth year from the date of issue, on a date announced by the RBI.

SGB 2018-19 Series-II Redemption Price

According to a release by the RBI, the SGB 2018-19 Series-II bonds are set to conclude their eight year tenure on October 23, 2026. The RBI has said in the release that the final redemption price is Rs 14,425 per unit of SGB.

The central bank determined this final price based on the simple average of the closing price of 999 purity gold for the three business days preceding the redemption date, as published by the India Bullion and Jewellers Association Ltd (IBJA). Specifically, the calculation factored in the closing prices for October 19, October 21, and October 22, 2026.

SGB 2018-19 Series-II Returns

SGB 2018-19 Series-II investors will earn an absolute return of 358.52 per cent or a profit of Rs 11,279. The issue price for SGB 2018-19 Series-II was Rs 3,146 per gram. The government allowed a discount of Rs 50 per gram from the issue price for investors who applied online and made the payment through digital mode. For such investors, the issue price of the Gold Bond was Rs 3,096 per gram, leading to a profit of Rs 11,329 or a profit of 365.92 per cent.

Investors who are eligible for final redemption would have also earned a yearly interest of 2.50 per cent. For SGB 2018-19 Series-II investors, the amount would have been Rs 78.65 per gram every year. The final amount will be credited to the SGB investor's bank account linked to the demat account automatically.

Taxation on SGBs

The redemption of SGBs is tax exempt for investors who have held it for the entirety of the eight year maturity period, provided they were allotted the bonds in the primary issue. Crucially, if Sovereign Gold Bonds are bought from the secondary market, they are not tax exempt upon maturity. Furthermore, the interest earned on the SGBs is not tax exempt, thus investors would have paid a yearly tax on the interest earned basis their income tax slab rate.

Looking ahead, demand for the yellow metal is expected to remain strong and persist into the upcoming festive season. Traditionally, celebrations like Diwali and Dhanteras trigger a surge in physical gold purchases across India, pushing domestic prices higher as consumers flock to jewellers. The cultural affinity for the yellow metal, combined with robust seasonal buying, typically creates a favourable price environment that further rewards long term investors.