Sovereign Gold Bonds deliver massive returns amid soaring gold prices; check schedule for upcoming early redemptions

The Reserve Bank of India (RBI) has announced the price for premature redemption of all the Sovereign Gold Bond (SGB) tranches scheduled for early redemption in the six-month period ending September 2025.

The most recent announcement was for the SGB 2019-20 Series-IV that was due for early redemption on September 17, 2025. The price was set at ₹11,003 per unit based on a simple average of closing gold prices of 999 purity, according to the data by the India Bullion and Jewellers Association Ltd. (IBJA), for the three business days of September 12, 15 and 16.

Compared to the issue price of ₹3,890, the series gave a return of 183%, excluding the 2.5% annual interest.

On the back of soaring gold prices, SGBs have performed remarkably well in 2025. Here are some major SGBs and their redemption prices announced in the past few months by the RBI:

SGBs: How they work

SGBs, government-backed securities that are measured in grams of gold, have a tenure of eight years, but early redemption is allowed after the fifth year from the bond’s issuance. Premature redemption can be done only on scheduled interest payout dates, which happen every six months.

According to RBI’s rules, the redemption price is calculated on the basis of 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).

An annual 2.5% return is offered on SGBs, which is credited into the investors’ accounts twice a year. This is over and above the returns investors receive through the difference between gold’s price when the bonds were issued and when they’re redeemed.

Gold prices

Gold prices have increased by over 40% in just 2025 due to several reasons, including rising geopolitical tensions, market volatility, central bank gold buying and weak currencies.

On Friday, September 12, gold prices (24K, 99.9% purity) closed at ₹1,13,800 per 10 gram in Delhi, up 44.14% as compared to ₹78,950 per 10 gram recorded on December 31, 2024.

Gold futures have hit multiple lifetime highs in the last 10 days. On Tuesday, September 16, gold futures for the October delivery touched a record high of ₹1,10,666 per 10 gram on the Multi-Commodity Exchange (MCX).

SGBs have given bumper returns to investors this year, but they have become very high-cost borrowing for the government. The government discontinued the SGB scheme in the Union Budget 2025 due to rising gold prices and is expected to release new tranches only when these bonds become cost-effective as compared to other borrowing tools like Government Securities (G-Secs).

With rising gold prices, gold ETFs have also jumped significantly in the past few months. In August, net inflows into gold ETFs climbed 74.3% to ₹2,189.51 crore.

In the last couple of days after the US Fed's rate cut announcement, gold prices have eased a little. However, market analysts expect gold prices to continue rising in the near future.

SGBs Scheme Calendar (October 2025-March 2026)

Here is the SGBs Scheme Calendar for premature redemption between October 2025 and March 2026:

These dates can be revised in case of unscheduled holiday(s).