Early redemption in SGB 2019-20 Series I issue offers up to 378% absolute return: Check details

The Reserve Bank of India has announced the premature redemption date for Sovereign gold bond 2019-20 Series-I issue as June 11, 2026. Accordingly, investors who had applied for premature redemption for today can get the proceeds directly credited into their bank account which was mentioned at the time of the application.

According to the rules, the RBI allows premature redemption of SGBs (currently discontinued because of the substantial burden to the exchequer) after the fifth year from the date of issue of such Gold Bond on the date on which interest is payable.

The issue during its launch was priced at ₹3,146 and ₹3,196 for online and offline investors, respectively. Accordingly, if investors in the scheme redeem prematurely at the price suggested they would make an absolute gain of up to 378%.

The IBJA or Indian Bullion Jewellers Association (IBJA) based on the simple average of the closing price of the last three business days from the redemption date announces the redemption price. For this issue, the prices considered were of June 10, June 9 and June 8.

The amount is usually and mostly credited on the same date as the interest payment date.However, if the redemption date happens to fall over the weekend, it will be credited on the next working day.

June SGB premature redemption timeline

Another SGB 2020–21 Series III will be available for premature redemption in June itself. And the due date for the same is June 16. However, investors willing to apply for the redemption can do so between May 16-June 6, i.e. the date for its premature redemption has already passed and now you need for the next redemption date in case you wish to make an earlier exit from the investment.