Gold Bond Investors Reap Over 109% Return as RBI Announces Premature Redemption Price
This redemption will take place on April 28, 2025. According to a recent Government of India notification, SGBs become eligible for premature redemption five years after the issuance date, which for this series is April 28, 2020.
The Reserve Bank of India (RBI) has announced the premature redemption price for the Sovereign Gold Bond (SGB) Scheme, Series I of 2020-21. This redemption will take place on April 28, 2025. According to a recent Government of India notification, SGBs become eligible for premature redemption five years after the issuance date, which for this series is April 28, 2020.
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SGB Investors See Returns Exceeding 109%
The premature redemption price for the SGB Scheme 2020-21, Series I Tranche 38, has been set at Rs 9,600 per unit. This price is based on the average closing price of gold with 999 purity for the three business days preceding the redemption date, specifically April 23, 24, and 25, 2025. The redemption price offers a remarkable return of over 109% when compared to its issue price of Rs 4,589 (Rs 4,639 minus a Rs 50 discount) for investors who purchased the scheme online.
What Are Sovereign Gold Bonds (SGBs)?
Sovereign Gold Bonds (SGBs) are government-backed securities that allow investors to invest in gold while earning interest. They offer a secure and consistent return, making them an appealing option for those looking to benefit from gold’s value. Investors can opt for premature redemption of SGBs after holding them for five years from the bond issuance date.
SGB Premature Redemption Schedule: April 2025 – September 2025
The RBI has also provided a detailed schedule for the tranches eligible for premature redemption between April 2025 and September 2025. Investors can review the redemption dates and proceed with their requests as per the schedule provided.
| S. No | Tranche | Issue Date | Premature Redemption Date | Request Submission Period |
|---|---|---|---|---|
| 1 | 2017-18 Series III | 16-Oct-17 | 16-Apr-25 | 17-Mar-25 to 7-Apr-25 |
| 2 | 2017-18 Series IV | 23-Oct-17 | 23-Apr-25 | 24-Mar-25 to 15-Apr-25 |
| 3 | 2017-18 Series V | 30-Oct-17 | 30-Apr-25 | 31-Mar-25 to 21-Apr-25 |
| 4 | 2017-18 Series VI | 6-Nov-17 | 6-May-25 | 5-Apr-25 to 28-Apr-25 |
| 5 | 2017-18 Series VII | 13-Nov-17 | 13-May-25 | 11-Apr-25 to 3-May-25 |
| … | … | … | … | … |
| 29 | 2020-21 Series I | 28-Apr-20 | 28-Apr-25 | 29-Mar-25 to 19-Apr-25 |
| 30 | 2020-21 Series II | 19-May-20 | 19-May-25 | 19-Apr-25 to 9-May-25 |
Note: Investors must submit their premature redemption requests at least 30 days before the coupon payment date to ensure proper processing.
SGB Early Redemption Process – How to Apply
Although the SGB bond tenure is 8 years, investors can opt for premature redemption after holding the bonds for 5 years, on any coupon payment date.
To initiate the premature redemption process, investors must approach their respective bank, SHCIL office, Post Office, or agent at least 30 days before the coupon payment date. The request will only be processed if submitted one day before the coupon payment date.
Tradability of SGBs
SGBs held in demat form can also be traded on exchanges, making them transferable to eligible investors.
Investors interested in more information regarding the Sovereign Gold Bond (SGB) Scheme are advised to refer to the Consolidated Procedural Guidelines issued by the Reserve Bank of India for detailed instructions on the redemption process.
