SGB 2019-20 series V premature redemption: 2019 gold bonds now worth nearly 4 times their original price

The Reserve Bank of India (RBI) has fixed the premature redemption price for Sovereign Gold Bond (SGB) 2019-20 Series V at ₹14,725 per gram, with redemption due on October 15, 2026.

The bonds were originally issued on October 15, 2019, at ₹3,788 per gram, or ₹3,738 for investors who applied online and paid digitally. However, the window for submitting premature redemption requests for this tranche closed on October 5, 2026. The announced redemption price is therefore relevant for investors whose redemption requests were submitted within the prescribed period.

In its announcement, the RBI stated: “The redemption price for premature redemption due on October 15, 2026, shall be ₹14,725/- (Rupees Fourteen Thousand Seven Hundred and Twenty-Five Only) per unit of SGB based on the simple average of closing price of gold for the three business days i.e., October 12, October 13, and October 14, 2026.”

How much will investors gain?

At the announced redemption price, regular investors stand to gain ₹10,937 per gram, while online investors who received the initial discount stand to gain ₹10,987 per gram, excluding interest and taxes.

For example, an investor who purchased SGBs worth ₹1 lakh at the original issue price of ₹3,788 per gram would receive approximately ₹3.89 lakh upon redemption.

• Gold purchased: ₹1,00,000 ÷ ₹3,788 = approximately 26.40 grams.

• Redemption value: 26.40 × ₹14,725 = approximately ₹3,88,806.

• Capital gain: ₹3,88,806 − ₹1,00,000 = approximately ₹2,88,806, or 288.8%.

This means the original investment would be worth nearly 3.9 times its initial value, excluding interest and taxes.

Investors who purchased at the discounted price of ₹3,738 per gram would enjoy a slightly higher capital appreciation of approximately 294%.

This interest is additional to the capital gain from redemption.

How is the redemption price determined?

Under the Sovereign Gold Bond Scheme, premature redemption is permitted after the fifth year from the date of issue, on an interest payment date. Since this tranche was issued on October 15, 2019, the applicable premature redemption date is October 15, 2026.

The redemption price is based on the simple average of the closing prices of 999-purity gold for the three preceding business days, as published by the India Bullion and Jewellers Association Ltd. (IBJA).

Other premature redemption dates for SGB investors