SGB 2019-20 Series I Premature Redemption Price Announced; Investors To Get Over 378% Return

The Reserve Bank of India (RBI) has announced the premature redemption price for the 2019-20 Series I tranche of the Sovereign Gold Bond scheme. The announcement comes at a time when gold prices have witnessed a slight uptick this week on account of the fragile ceasefire and high volatility.

SGB 2019-20 Series-I Premature Redemption Date

Investors who hold SGB 2019-20 Series-I units can prematurely redeem their holdings as the RBI has fixed June 11 as the date for premature redemption of the tranche. Investors who hold the SGB 2019-20 Series-I can prematurely redeem their holdings as RBI regulations allow early redemption of SGBs five years from the date of the issue on specific dates when semi-annual interest is payable.

How Much Will SGB 2019-20 Series I Investors Gain?

Investors can prematurely redeem their SGB 2019-20 Series I holdings at a price of Rs 15,038 per unit. The subscription amount for online investors was fixed at Rs 3,146 per gram, including a digital discount of Rs 50. On the other hand, the issue price was fixed at Rs 3,196 for investors who purchased their SGBs offline.

“Accordingly, the redemption price for premature redemption due on June 11, 2026, shall be Rs 15,038/- (Rupees Fifteen Thousand and Thirty Eight only) per unit of SGB based on the simple average of the closing price of gold for the three business days, i.e., June 08, June 09, and June 10, 2026,” RBI said in a release.

Given the redemption price set by RBI, online investors are set to get an absolute capital return of approximately 378 per cent on June 11 if they prematurely redeem their holdings. Thus, investors who purchased SGBs online are set to make absolute capital gains of Rs 11,892 per unit, while offline buyers will see gains of Rs 11,842 per unit.

How Is The Premature Redemption Price Calculated?

The premature redemption price for SGBs is determined using the simple average of the closing prices of 999 purity gold from the India Bullion and Jewellers Association (IBJA) website. The price of gold from three working days prior to the redemption date is considered for calculating the average.

For the SGB 2019-20 Series I , the premature redemption price was calculated on the basis of the simple average of the closing prices on June 8, June 9, and June 10, 2026. According to the IBJA website, the daily closing prices for 999 purity gold were Rs 15,148.9 on June 8, Rs 15,148.9 on June 9, and Rs 15,251.9 on June 10.

SGB investors also receive annual interest at the fixed rate of 2.50 per cent in addition to the amount they get upon redemption. However, this interest is credited semi-annually directly to the bank account of investors and remains taxable as per the  income tax slab of the investor.

Analysing Gold's Rally in Recent Months

The returns investors get upon redemption of their SGB holdings are directly linked to gold’s historic multi-month rally, which has sustained into 2026. The rally has been driven by several factors, such as macroeconomic shifts, central bank accumulations worldwide, and safe haven buying amid inflationary undertones.

While prices experienced a minor stabilisation in the first few days of June on account of cooling geopolitical friction, the foundational strength built up over recent months ensured that long-term asset holders secured sizeable capital appreciation.