Attention SGB Investors! RBI Announces Premature Redemption Price of Sovereign Gold Bond; 99% Returns in 5 Yrs

SGB Premature Redemption: The Reserve Bank of India has recently announced the premature redemption price of sovereign gold bonds which were issued in 2020. The SGB Series -IV is due on Monday, July 14. Investors can withdraw their investment in the scheme with a return of nearly 99.67%, according to an RBI notification.

The RBI, in its notification, mentioned that investors can redeem the SGB Series-IV bonds before their maturity date for Rs 9688 per unit. The maturity period of SGB schemes is generally 10 years, whereas investors can withdraw their investment after the first five years of the scheme, which is the premature tenure of SGB.

RBI SGB Scheme Redemption Price

"The redemption price for premature redemption due on July 14, 2025, shall be ₹9688/- (Rupees Nine Thousand Six Hundred and Eighty-Eight only) per unit of SGB based on the simple average of closing gold price for the three business days i.e., July 09, July 10 and July 11, 2025," stated RBI in a press release.

Interest Payment on SGB Schemes

The gold bond scheme run by the RBI offers an interest rate of 2.5% per annum on the initial investment amount. The interest earned on SGB schemes will be credited semi-annually to the investors' bank account.

What Are Sovereign Gold Bonds (SGBs)?

Sovereign Gold Bonds (SGBs) are government-backed securities pegged to gold grams. They serve as an alternative to physical gold ownership. Investors purchase these bonds in cash and receive cash upon maturity. Issued by the RBI for the Government of India, they offer a secure investment option.

How RBI SGB Rate Is Calculated?

The SGB Series-IV from 2020-21 was initially priced at Rs 4,852 per gram in July 2020. The RBI's press release from July 11, 2025, outlines how the SGB redemption price is determined. It states: "The redemption price of SGB shall be based on 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)." This ensures a fair valuation based on recent market prices.

For those considering early redemption on July 14, 2025, each unit of SGB will be valued at Rs 9,688. This figure is derived from averaging the closing gold prices on July 09, July 10, and July 11, 2025. This method ensures transparency and fairness in determining bond value.

Returns and Interest Details

Investors also benefit from a fixed annual interest rate of 2.50% on their initial investment amount. This interest is credited semi-annually to their bank accounts. The final interest payment coincides with bond maturity alongside principal repayment.

How To Redeem SGB?

Investors are notified one month before bond maturity about upcoming proceedings. On maturity day, proceeds are transferred to their registered bank accounts. Any changes in account details or email addresses should be promptly communicated to banks or relevant authorities to ensure smooth transactions.

Although SGBs have an eight-year term, early encashment is allowed after five years on coupon payment dates. Bonds held in demat form can be traded on exchanges or transferred to eligible investors under specific regulations.