RBI Sets Sovereign Gold Bond Redemption Price At ₹9,600 Per Unit, Offering Over 109% Returns

Scheduled for April 28,2025,The Reserve Bank of India (RBI) has announced the premature redemption price for the Sovereign Gold Bond (SGB) Scheme, Series 1 of 2020-21.

As published by the India Bullion and Jewellers Association Ltd (IBJA), the premature redemption price has been fixed at 9,600 per unit, based on the average closing price of gold of 999 purity for the three business days preceding the redemption date of April 23,24, and 25, 2025.

The redemption price of the SGB Scheme 2020-21- Series 1 Tranche 38 is over 109% compared to its issue of Rs 4,589 (Rs 4,639 minus Rs 50 discount) for investors who bought the scheme online.

As per the Government of India's notification, SGBs can be redeemed prematurely five years after the completion of the issue date, which for this series is April 28,2020.

SGB's are government securities denominated in grams of gold, offering investors both the market-linked value of gold at maturity and an assured annual interest of 2.5%, payable semi-annually.

It is important to note that the Government of India, in the Union Budget 2025, discontinued fresh issuances of SGBs. However, all existing bonds remain valid and will be redeemed either at maturity or an eligible premature redemption dates.

Missing the early redemption window does not result in a loss of investment. The bond will continue to earn the fixed 2.5% interest annually until the 8-year maturity. Alternatively, investors may sell the bonds in the secondary market at prevailing market prices.

Investors can exit their holdings after the fifth year on interest payment dates, either through premature redemption facilitated by banks, post offices, and stock exchanges, or by selling bonds in the secondary market. Experts advise investors to coordinate with their bank, post office, or depository participant well ahead of redemption dates to ensure smooth processing.

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