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SGB Premature Redemption: RBI has announced the premature redemption price for Sovereign Gold Bonds for these two tranches; Check process
Sovereign gold bond
SGB Premature Redemption: The Reserve Bank of India (RBI) has announced the premature redemption price for Sovereign Gold Bonds (SGB) 2017-18 Series-XIV and SGB 2018-19 Series-IV, both of which are eligible for early redemption on July 1, 2025. Sovereign Gold Bonds have a maturity period of eight years; however, investors can opt for premature redemption after the completion of five years from the date of issue.
How the Redemption Price Is Calculated
According to the RBI’s press release dated June 30, 2025, the redemption price for Sovereign Gold Bonds is based on the simple average of the closing gold price (999 purity) for the previous three business days before the redemption date.
These prices are published by the India Bullion and Jewellers Association Ltd (IBJA). For July 1, 2025, the average was taken from June 26, June 27, and June 30.
Based on this calculation, the redemption price for both the eligible SGB tranches has been set at Rs 9,628 per unit. This price reflects the value of one gram of gold, as each SGB unit represents one gram.
Returns from SGB 2017-18 Series-XIV
The SGB 2017-18 Series-XIV, which was issued in January 2018 at Rs 2,831 per gram, has delivered an impressive return. With a current redemption price of Rs 9,628, the return stands at nearly 240%, excluding the annual interest payouts.
Returns from SGB 2018-19 Series-IV
The SGB 2018-19 Series-IV, issued in January 2019 at Rs 3,119 per gram, also shows strong performance. The absolute gain amounts to Rs 6,509, which translates to a return of around 208.69%. Again, this does not include the fixed interest income of 2.5% per annum.
Interest Income
In addition to price appreciation, SGBs offer a 2.5% fixed interest rate per year, calculated on the initial investment amount. This interest is paid semi-annually and credited directly to the investor’s bank account. The last interest payment is made along with the principal at maturity, further enhancing the overall return.
Steps for Premature Redemption
- Investors looking to redeem their bonds early should first confirm which tranche or series their holdings belong to by checking the issue date.
- They must also submit a redemption request within the window specified by their bank or the RBI’s schedule.
- Missing the deadline could delay the redemption process.
Redemption Process Details
The RBI or the servicing bank notifies investors one month before the maturity or the eligible redemption date. Upon maturity, the redemption amount is automatically credited to the investor’s bank account linked to the bond. If there have been any changes in account details, such as a new bank account or email ID, investors must update this information with their bank, SHCIL, or Post Office in advance.
Aparna Deb is a Subeditor and writes for the business vertical of News18.com. She has a nose for news that matters. She is inquisitive and curious about things. Among other things, financial markets, economy, a…Read More
Aparna Deb is a Subeditor and writes for the business vertical of News18.com. She has a nose for news that matters. She is inquisitive and curious about things. Among other things, financial markets, economy, a… Read More
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