Investors who bought into the Sovereign Gold Bond (SGB) 2018-19 Series-V back in January 2019 are potentially looking at an impressive windfall this week. The Reserve Bank of India (RBI) has announced the premature redemption price for this tranche of SGBs. The price is pegged at Rs 9,820 per unit, a significant jump from the original issue price of Rs 3,214 per gram.
This premature redemption, scheduled for Tuesday, July 22, 2025, applies to those investors who have completed the mandatory five-year holding period. While the full tenure of these bonds is eight years, investors are allowed to exit early, but only from the fifth year onwards, and only on interest payout dates.
The RBI, in its release dated July 21, said the redemption price has been calculated based on the simple average of closing gold prices (999 purity) published by the India Bullion and Jewellers Association (IBJA) for the preceding three working days i.e., July 17, 18, and 21.
Now let’s break down the numbers:
From an original investment of Rs 3,214 per gram to a redemption value of Rs 9,820 per gram, the price has more than tripled. This is approximately a 205.56 per cent return, excluding the annual 2.5 per cent interest that investors have been receiving semi-annually. When you factor in those payouts, the total returns are even higher.
What are SGBs?
For context, SGBs are government-backed securities denominated in grams of gold. They are essentially a digital alternative to holding physical gold, minus the storage hassle and risks. Issued by the RBI on behalf of the Government of India, these bonds also come with the tax benefit of zero capital gains tax if held till maturity.
Those looking to redeem early need to plan a little. Investors must submit their request to the issuing bank, post office, or agent at least one working day before the interest payout date. This window is critical, and missing it means waiting for the next eligible date.
The RBI had also announced the premature redemption price for another SGB tranche — Series-IV, earlier this month, which was due on July 14. With gold prices continuing to climb, SGB investors across the series are seeing meaningful appreciation on their holdings.
For long-term savers who took the bet on sovereign gold bonds a few years ago, this is a clear example of patient investing paying off, quite literally.
