The Reserve Bank of India’s (RBI) Sovereign Gold Bond (SGB) 2018-19 Series-II has delivered more than 300 per cent returns to its investors. Investors who had subscribed to this series in October 2018 saw their investments multiply more than four times by the time of redemption.
The 2018-19 Series-II was issued on October 23, 2018, at a price of Rs 3,146 per gram. The RBI offered investors the opportunity to redeem their investments prematurely on October 23, 2025. Investors who redeemed their bonds received Rs 12,704 per gram, making a profit of Rs 9,558 per gram. This translates into a return of 303.81 per cent over the price they originally paid. It is important to note that this figure excludes the fixed 2.5 per cent annual interest paid semi-annually, which further enhances total returns.
To put the gains into perspective, an investor who had purchased 10 units of this series would have invested Rs 31,460 initially. By the time of redemption, the value of these holdings grew to Rs 1,27,040, quadrupling their initial investment.
How SGB Redeem Price Is Calculated
The redemption price is calculated as the simple average of the closing prices of gold of 999 fineness, published by the India Bullion and Jewellers Association (IBJA), for the three working days preceding the redemption date. For this series, the prices on October 17, 20, and 22, 2025, were considered.
SGBs have an eight-year fixed tenure, but RBI regulations allow investors to redeem their bonds early, after five years from the issue date. This facility provides liquidity to investors without requiring them to hold the bonds until maturity.
The window to apply for premature redemption in this particular series was between March 24 and April 15, 2025. Consequently, investors who did not submit their redemption requests within this period had to hold their bonds until the scheduled maturity date.
Dual Benefit Of SGBs
SGBs are government-backed securities denominated in grams of gold, offering investors a secure alternative to holding physical gold. Launched in 2015, the scheme aims to reduce the demand for physical gold while providing a convenient way to invest in the precious metal.
One of the key advantages of SGBs is their dual benefit structure. Investors gain from any rise in gold prices over time while also earning a fixed interest rate, making the instrument an attractive option compared to holding physical gold, which does not offer interest. Moreover, gains on maturity from SGBs are tax-free, which further enhances their appeal for wealth creation.
Gold has seen a massive rise in demand recently, as investors increasingly view it as a safe haven amid global economic and geopolitical uncertainties. According to the latest RBI bulletin, international gold prices have climbed due to ongoing tensions, prompting both central banks and private investors to increase their buying.
Data from the IBJA shows that as of October 24, the price of 999 pure gold stood at Rs 12,335 per gram.
