SGB 2019-20-VI investors to bag 200% return as RBI sets redemption price

Central bank sets redemption price at Rs 11,992 per gram, based on the average closing price of gold of 999 purity

 

Investors in Sovereign Gold Bond (SGB) 2019–20 Series VI are set to get more than 200 per cent return after the Reserve Bank of India (RBI) announced it will allow premature redemption for the scheme issued on October 30, 2019.

 

Applications will be allowed after October 30, marking the end of the fifth year of the eight-year bond term. According to notification by the central bank, premature redemption on interest payment dates is permitted after the fifth year. The RBI has set the redemption price at Rs 11,992 per gram, based on the average closing price of gold of 999 purity published by the India Bullion and Jewellers Association (IBJA) for October 27–29, 2025.

 

This redemption window offers investors a chance to cash out before maturity while benefiting from the strong appreciation in gold prices since 2019.

 

Rs 3,785 to Rs 11,992: 217 per cent gain

 

When this SGB tranche was first issued in October 2019, the issue price stood at Rs 3,785 per gram for investors applying online (Rs 3,835 for offline investors).

 

At the upcoming redemption value of Rs 11,992, investors would see:

 

Absolute return: Rs 8,207 per gram

 

Total return: 217 per cent over six years

 

Interest benefit: An additional 2.5 per cent per annum, paid semi-annually, till redemption

 

In simple terms, a Rs 1 lakh investment in this tranche could now be worth nearly Rs 3.17 lakh, excluding the interest component.

 

What investors should do

 

Bondholders who wish to opt for early redemption must follow these key steps:

 

Check your SGB series and issue date – only the 2019–20 Series VI bonds are eligible this time.

 

Submit a redemption request to your bank, post office, or authorised agent before the deadline announced by them.

 

Ensure bank account details are updated, as redemption proceeds and final interest will be credited directly.

 

Why SGBs remain a safe bet

 

SGBs continue to attract long-term investors seeking a gold-linked return without storage or purity concerns. While there is market risk if gold prices fall, the principal value is linked to gold prices, not fixed in rupees, meaning investors retain exposure to the underlying metal’s value.