 "Gold investors get 387% returns as RBI redeems 2017-18 SGB series")
Gold investors have begun 2026 with strong gains, as the Reserve Bank of India (RBI) completed the final redemption of Sovereign Gold Bond (SGB) 2017-18 Series XIV on January 1. The tranche, issued eight years ago, has delivered one of the sharpest returns seen across financial gold products, underlining why SGBs have remained popular among long-term investors.
The bond, originally issued on January 1, 2018, completed its full eight-year tenure at the start of the New Year, making it among the earliest SGB series to mature in 2026.
Redemption price fixed at ~13,486 per gram
The RBI fixed the final redemption price of the bond at ~13,486 per unit (per gram). This price was calculated based on the simple average of the closing price of 999-purity gold published by the India Bullion and Jewellers Association Ltd (IBJA) for the previous three business days, December 29, 30 and 31, 2025.
Under government rules, SGBs are redeemed at market-linked prices, ensuring investors benefit directly from gold price movements over the holding period.
Nearly 4x growth in eight years
Investors in this series had purchased the bonds at an issue price of ~2,890 per gram in 2018. On redemption, they received ~ 13,486 per gram, translating into an absolute price gain of about 367 per cent over eight years, a total of about 387 per cent return if interest rate is added as well.
On an annualised basis, this works out to a compounded annual growth rate of roughly 21 per cent, driven purely by gold price appreciation. In addition, investors earned 2.5 per cent annual interest, paid on the initial investment value.
For example, a ~100,000 investment made at the time of issue would have grown to about ~467000 on redemption. Including cumulative interest income of nearly ~20,000, the total value would be close to ~487000.
Tax efficiency adds to the appeal
One of the biggest advantages of SGBs is their tax efficiency. While the interest income is taxable as per the investor’s income slab, capital gains on redemption are fully tax-free for individual investors. This significantly enhances post-tax returns compared with physical gold or gold ETFs.
What are Sovereign Gold Bonds?
The Sovereign Gold Bond scheme was launched by the government to reduce dependence on physical gold imports and channel household savings into financial assets. Issued by the RBI on behalf of the Centre, the bonds are denominated in grams of gold and carry a fixed tenure of eight years, with an exit option after five years on interest payment dates.
SGBs can be held in demat or certificate form, traded on exchanges, transferred, or used as collateral for loans, offering both flexibility and long-term wealth creation linked to gold prices.