Sovereign Gold Bonds in 2025: How investors struck gold with up to 332% returns

This year has been sensational for investors holding gold in their portfolios. Gold prices have surged over 70% year-over-year (YoY), and the rally shows no signs of slowing, given the current geopolitical and economic environment. Sovereign Gold Bond (SGB) investors benefited from the rising gold prices in 2025 as they cashed out with remarkable absolute returns on maturity, crossing 300% across eight tranches.

Several other SGB tranches delivered excellent returns, with many exceeding 200% on final redemption. Here are some SGBs and their redemption details:

What are SGBs?

SGBs are government-backed securities issued by the Reserve Bank of India, enabling digital investments in gold without the risks and costs associated with holding physical gold.

“SGBs are government securities denominated in grams of gold, issued by RBI on behalf of the Government of India, and are substitutes for physical gold,” says RBI on its website.

How is the redemption price calculated for SGBs?

SGBs have a maturity period of eight years, and the redemption price is calculated 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).

“The nominal value of Gold Bonds shall be in Indian Rupees fixed on the basis of the simple average of the closing price of gold of 999 purity, published by the India Bullion and Jewelers Association Limited, for the last 3 business days of the week preceding the subscription period,” the RBI says.

SGB returns

SGBs earn an annual interest of 2.5%, which is credited into the investors’ accounts twice a year. Apart from this, the gold bonds earn through the difference between gold’s price when the bonds were issued and when they’re redeemed. This makes them extremely attractive for investors.

SGB premature redemption

For premature redemptions, investors have to send requests within the submission window published for their tranche by approaching the receiving office, which can be the issuing bank branch, the designated Post Office, the agent, the Stock Holding Corporation of India office, the RBI Retail Direct, or the office through which the investor purchased the bonds.

Investors must approach the receiving office 30 days before the interest payment date. Otherwise, investors can also sell their units in the secondary market or hold them till full maturity.