Soverign Gold Bond redemption: The Reserve Bank of India (RBI) has announced the early redemption value for Sovereign Gold Bonds (SGB) 2018-19 Series-V. Investors can opt for early redemption only after holding the bonds for five years from the issue date.According to RBI, the above mentioned SGB is up for early redemption on Tuesday, July 22, 2025. These gold bonds reach maturity after an 8-year period from their issue date. Sovereign Gold Bonds or SGBs are in essence government-backed securities that are measured in grams of gold. They serve as an alternative to investment in physical gold. Investors need to make cash payments for purchasing these bonds, and upon maturity, they receive cash settlements. The Government of India authorises the Reserve Bank of India to manage the issuance of these bonds.We take a look at the early redemption value, potential returns from choosing premature redemption, and other details as listed in an ET report:
SGB 2018-19 Series-V Redemption Value
For SGBs due for early redemption on July 22, 2025, the redemption value is set at Rs 9,820 per unit. This calculation considers the average closing gold prices over three business days: July 17, 2025, July 18, 2025, and July 21, 2025.
Understanding SGB Redemption Price Calculation
“The redemption price of SGB shall be based on the simple average of the closing gold price of 999 purity of the previous three business days from the date of redemption, as published by the India Bullion and Jewellers Association Ltd (IBJA),” says RBI in its July 21, 2025 release.
Investment Returns Analysis
The initial issue price of SGB 2018-19 Series-V in January 2019 was Rs 3214 per gram. The absolute gain amounts to Rs 6,606 (Rs 9,820 – Rs 3214), excluding interest earnings. This represents a substantial return of 205.56% on the investment.
SGB Interest Payment Structure
For investors Sovereign Gold Bonds mean a fixed annual interest of 2.50% on the principal investment amount. The interest payments are credited twice a year directly to the investor’s bank account. The final interest crediting happens at maturity in addition to the principal amount.
Is there flexibility to redeem SGBs before maturity?
Whilst the bonds have an 8-year tenure, early redemption is permitted after five years from issuance on specified coupon payment dates. When held in demat format, these bonds can be traded on exchanges. Additionally, they are transferable to other qualified investors.
What is the process for exiting an SGB investment?
If you want to opt for early redemption, you have to contact your bank/SHCIL offices/Post Office/agent 30 days before to the coupon payment date. Early redemption requests are processed only if they ate submitted at least one day before the coupon payment date. The redemption amount is then transferred to the bank account specified during the bond application.
