SGB has given returns of about 315%.
The Reserve Bank of India (RBI) had declared the premature redemption price for the Sovereign Gold Bond (SGB) 2019-20 Series-II issued on July 16, 2019. According to the statement of the central bank, investors can redeem this SGB prematurely from January 16, 2026. As per RBI rules, SGBs are allowed to be prematurely redeemed on the interest payment date after completion of 5 years from the date of issue.
How is the redemption price of SGB determined?
As per the rules, the redemption value is decided on the basis of simple average of closing price of gold of 999 purity of last three working days, which is issued by India Bullion and Jewelers Association (IBJA). The price of SGB for premature redemption on January 16, 2026 has been fixed at Rs 14,092 per unit. This price is based on the average of the closing prices of gold on 12 January 2026, 13 January 2026 and 14 January 2026.
Issue price of SGB 2019-20 Series-II
This series was issued for offline investors at Rs 3,443 per gram. Investors who invested online and made digital payments got a discount of Rs 50 per gram. The issue price for such investors was Rs 3,393 per gram. This SGB, issued on July 16, 2019 at a price of Rs 3,393 per gram, has given a nominal return of about 315% on premature redemption.
Investors should keep these things in mind
SGB offers fixed interest at the rate of 2.50% per annum, which is given on the initial investment amount. This interest is deposited in the investor’s bank account every six months. The last interest installment is paid along with the principal amount on maturity. Investors holding SGB should check the redemption schedule carefully. Identify which tranche your bonds belong to by looking at the issue date. Submit your redemption request early before the due date.
Sovereign Gold Bond (SGB) Scheme Information
The Sovereign Gold Bond Scheme is run by the Government of India through RBI. It is a secure paper/demat alternative to physical gold, eliminating the need for storage and purity concerns. Along with this, 2.5% annual interest is also available. SGB can be prematurely redeemed after 5 years from the date of issue, on the date of interest payment.