Sovereign Gold Bond premature redemption today: ₹3,835 investment turns into ₹14,213; check SGB 2019-20 Series VI investors' gains

Investors who bought Sovereign Gold Bonds (SGB) 2019-20 Series VI in October 2019 have a reason to look back at their investment. The Reserve Bank of India (RBI) has fixed the premature redemption price of this tranche at ₹14,213 per unit, compared with its original issue price of ₹3,835 per gram.

The redemption is scheduled for October 30, 2026, marking seven years since the bonds were issued. For investors who opted for premature redemption within the prescribed application window, the latest price represents a substantial increase in the gold-linked value of their holdings.

However, there is an important point to note: the application window for this redemption has already closed. Investors were required to submit their premature redemption requests between September 29 and October 21, 2026.

RBI fixes SGB 2019-20 Series VI redemption price at ₹14,213

According to the RBI's announcement, the premature redemption price has been set at ₹14,213 per unit, with each unit representing one gram of gold.

The gold prices used for the calculation were published by the India Bullion and Jewellers Association Ltd (IBJA).

Under the Government of India's notification dated September 30, 2019, SGB investors can opt for premature redemption after completing five years from the date of issue, provided the redemption takes place on an interest payment date.

From ₹3,835 to ₹14,213: How much have investors gained?

When the government opened subscriptions for SGB 2019-20 Series VI in October 2019, the issue price was fixed at ₹3,835 per gram.

The Ministry of Finance also offered a discount of ₹50 per gram to investors who applied online and made payments digitally. This brought their effective purchase price down to ₹3,785 per gram.

At the newly announced redemption price, the investment has recorded significant appreciation.

In other words, an investor who purchased one unit at the original issue price of ₹3,835 would receive ₹14,213 upon successful premature redemption, representing a price gain of ₹10,378 per unit.

This calculation excludes the interest earned during the investment period.

Investors also earned 2.5% annual interest

One of the key features of Sovereign Gold Bonds is that investors earn interest in addition to the appreciation in gold prices.

SGBs carry an annual interest rate of 2.5% on the initial investment amount, payable semi-annually. This interest is separate from the redemption value linked to gold prices.

Therefore, investors who held the bonds throughout the investment period and opted for premature redemption could benefit from both gold-price appreciation and the interest received over the years.

The latest redemption price highlights the significant appreciation recorded by this SGB tranche since its launch in 2019. Investors who entered at ₹3,835 per gram have seen the gold-linked value of their investment rise to ₹14,213 per unit.

Taxation of Sovereign Gold Bonds (SGBs)

The annual 2.5% interest earned on SGBs is taxable at the investor’s applicable income-tax slab rate. Capital gains arising from premature redemption after five years or sale on the stock exchange are taxable.