Sovereign gold bonds (SGBs) are a smart, alternative option for investing in gold instead of holding physical gold. SGBs are issued by the RBI and government with a fixed coupon rate of 2.50% on the initial investment value and without any capital gains tax on the maturity of the bonds. That being said, four SGBs are scheduled to mature in 2026. Since their inception, these SGBs have given mind-blowing 370% to near 385% returns. Let’s find out who they are and how to claim SGBs on maturity.
These SGBs are majorly part of Sovereign Gold Bond Scheme 2018-19 – Series.
1. Sovereign Gold Bond Scheme 2018-19 – Series I:
At the first on the list is the, SGB 2018-19 scheme in series 1, which will mature on May 4, 2026. The issue date was on May 4, 2018. This SGB was issued at an initial price of Rs 3,114.
Ahead of the maturity, as of April 27, 2026, this SGB’s last traded price is of Rs 15,020. Hence, investors can capture over 382% returns from the series 1 alone.
2. Sovereign Gold Bond Scheme 2018-19 – Series II:
The sovereign gold bond 2018-19 scheme in series 2 will mature on October 23, 2026. Its issue date was on October 23, 2018, at an issue price of Rs 3,146.
As of April 27, 2026, this SGBs last traded price is of Rs 14,900, which is a whopping 373.6% surge from the initial price.
3. Sovereign Gold Bond Scheme 2018-19 – Series III:
The series III will mature on November 13, 2026. This scheme’s issue data was on November 13, 2018, at an issue price of Rs 3,183.
Currently, the price is of Rs 15,140 apiece, which indicates a 375.6% upside from the issue price.
4. Sovereign Gold Bond Scheme 2018-19 – Series IV:
The fourth series of SGB 2018-19 scheme will mature on December 31, 2026. The issue date of this SGB stood on January 1, 2019, at an issue price of Rs 3,119.
The current price is at Rs 14,950, which is a return of 379% from the initial price.
Apart from this, all four SGBs have a coupon rate of 2.50% which was paid half yearly. Thereby, 2.5% was paid 16 times for 8 years. Hence, in a year, investors received 5% rate per annum.
Sovereign Gold Bonds Rules & Benefits:
Sovereign gold bonds are securities denominated in grams of gold and issued by RBI on behalf of the government. They are majorly substitutes of physical gold.
These bonds are issued in the denomination of 1 gram of gold and in multiples thereof. The minimum investment in SGB is of one gram with a maximum limit of subscription of 4 kg for individuals, 4 kg for Hindu Undivided Family (HUF) and 20 kg for trusts and similar entities notified by the government from time to time per fiscal year (April – March).
According to RBI’s guidelines, there may be a risk of capital loss if the market price of gold declines. However, the investor does not lose in terms of the units of gold which he has paid for.
Further, the guidelines pointed out that the quantity of gold for which the investor pays is protected, since he receives the ongoing market price at the time of redemption/ premature redemption. The SGB offers a superior alternative to holding gold in physical form. The risks and costs of storage are eliminated. Investors are assured of the market value of gold at the time of maturity and periodical interest. SGB is free from issues like making charges and purity in the case of gold in jewellery form. The bonds are held in the books of the RBI or in demat form eliminating risk of loss of scrip etc.
SGBs also have tax benefits. Interest on the Bonds will be taxable as per the provisions of the Income-tax Act, 1961 (43 of 1961). The capital gains tax arising on redemption of SGB to an individual has been exempted. The indexation benefits will be provided to long terms capital gains arising to any person on transfer of bond.
These bonds can be availed from banks, SHCIL offices/Post Offices/Designated stock exchanges/agents through which these securities have been purchased who will also provide other customer services such as change of address, early redemption, nomination, grievance redressal, transfer applications etc.
How To Claim Sovereign Gold Bonds On Maturity?
According to RBI, on maturity, the Gold Bonds shall be redeemed in Indian Rupees and the redemption price shall be based on simple average of closing price of gold of 999 purity of previous 3 business days from the date of repayment, published by the India Bullion and Jewelers Association Limited. Both interest and redemption proceeds will be credited to the bank account furnished by the customer at the time of buying the bond.
Here’s the procedure:
Firstly, an investor will be advised one month before maturity regarding the ensuing maturity of the bond.
Secondly, on the date of maturity, the maturity proceeds will be credited to the bank account as per the details on record.
In case you are required to make any changes such as revision in account number, email ids, then the investor must intimate the bank/SHCIL/PO promptly.
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