153% gains for Sovereign Gold Bond 2020-21 Series-VII, RBI sets exit price

Investors in Sovereign Gold Bond 2020-21 Series-VII can redeem early on Oct 20, 2025, at ₹12,792 per gram, yielding 153% return over five years

The Reserve Bank of India (RBI) has announced the premature redemption price and date for the Sovereign Gold Bond (SGB) 2020–21 Series-VII, offering investors 153 per cent return over five years.

 

Redemption details announced

According to the RBI’s notification, investors in this tranche can opt for early redemption on October 20, 2025, exactly five years from the date of issue. The redemption price has been fixed at Rs 12,792 per gram, based on the simple average of closing gold prices of 999 purity published by the India Bullion and Jewellers Association (IBJA) for October 15–17, 2025.

 

This particular SGB tranche was issued on October 20, 2020, at an issue price of Rs 5,051 per gram, implying a gain of Rs 7,741 per gram or roughly 153 per cent over five years, excluding the semi-annual interest of 2.5 per cent per annum that investors also earn during the holding period.

 

SGBs: A blend of safety and returns

Launched by the government, the Sovereign Gold Bond Scheme allows investors to gain exposure to gold without holding it physically.   

Key features include:

Tenure: 8 years, with an option for premature redemption after 5 years

 

Interest rate: 2.5 per cent per annum, payable semi-annually

 

Tax benefits: No capital gains tax on redemption after maturity

 

Storage-free investment: No concerns around purity or making charges, unlike jewellery

 

SGBs are issued by the RBI on behalf of the government and can be held in demat or physical certificate form.

 

How the redemption price is calculated

The redemption value is derived from the average closing price of gold (999 purity) for the three working days preceding the redemption date, as published by the IBJA. This method ensures transparency and fair valuation aligned with market trends.

 

What investors should do

 

Investors eligible for early redemption need to:

 

1. Verify the issue date and series of their holdings to ensure eligibility.

 

2. Submit their redemption request through the bank, post office, or agent handling their SGB account, within the deadline specified by the RBI.