Sovereign Gold Bond 2019–20 Series V: 296% gain for SGB investors on early redemption

For Sovereign Gold Bonds (SGBs), tax-free redemption is permitted on maturity after eight years from the date of issue. However, the government also provides an option for premature redemption after five years. Accordingly, for the SGB 2019–20 Series V issued on October 15, 2019, the RBI has fixed April 15, 2026, as the date for premature redemption.

The release by the apex banker said, “In terms of GOI notification F.No.4(7)-B(W&M)/2019 dated September 30, 2019 (SGB 2019-20 Series-V-Issue date October 15, 2019) on Sovereign Gold Bond Scheme, premature redemption of Gold Bond may be permitted after fifth year from the date of issue of such Gold Bond on the date on which interest is payable.”

Accordingly, the next due date for the premature redemption of the above tranche shall be on April 15, 2026, the release added.

The RBI release stated that the redemption price for premature redemption due on April 15, 2026, shall be ₹15,009/- per unit of SGB, based on the simple average of the closing prices of gold for the three business days, i.e., April 09, April 10, and April 13, 2026.

The redemption price of SGB shall be based on a simple average of closing price of gold of 999 purity of previous three business days from the date of redemption, as published by the India Bullion and Jewellers Association Ltd (IBJA).

As per the Ministry of Finance, the issue price on this series of SGB was ₹3,788 and given the premature redemption price set at ₹15,009, investors will reap a decent 296% return in nearly 6 years on the investment in gold. The return has been calculated considering the difference in the redemption price and the issue price over the issue price.

RBI has earlier in March 2026 intimated the following details of Sovereign Gold Bonds (SGB) issued by RBI which are falling due for premature redemption during H1 of 2026-27 (April 2026 to September 2026) along with the dates of submission of premature redemption requests by investors:

What are Sovereign Gold Bonds or SGBs?

Sovereign Gold Bonds or SGBs were introduced ten years ago to channelise household savings into the novel financial investment in gold. The government has made the instrument further lucrative by adding a 2.5% interest component payable semi-annually. Also, the instrument was made tax efficient with no tax on the capital gains in case the redemption is made upon the completion of eight years from the issue date.

As the recent exorbitant price rise overburdened the government, the Centre has for the time being discontinued the issue of fresh SGBs.