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The Reserve Bank of India (RBI) has announced the premature redemption price and date for the Sovereign Gold Bond (SGB) 2018-19 Series-I, giving investors a substantial windfall. Bonds issued in May 2018 at Rs 3,064 per gram will fetch Rs 12,039 per gram upon early redemption, a gain of nearly 293 per cent over five years.
Early redemption window opened on 4 November
According to the Government of India’s Sovereign Gold Bond Scheme, each tranche has an eight-year maturity. However, investors are allowed to redeem their holdings after the fifth year but only on the interest payment date. For the 2018-19 Series-I, that date falls on November 4, 2025, as notified by the RBI.
The redemption value has been fixed at Rs 12,039 per gram, calculated based on the simple average closing price of 999-purity gold published by the India Bullion and Jewellers Association (IBJA) for the three working days preceding the date, October 30, 31 and November 3, 2025.
How the 293 per cent return is calculated
Issue price (May 2018): Rs 3,064 per gram
Premature redemption price (Nov 2025): Rs 12,039 per gram
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Absolute gain: Rs 8,975 per gram
Percentage gain: Around 292.9 per cent (without including the annual 2.5 per cent interest paid semi-annually)
This means investors not only benefited from gold price appreciation but also earned steady interest income over the years.
Why the returns matter
SGBs combine the security of government backing with the potential of gold as an inflation hedge. Unlike physical gold, these bonds eliminate storage costs and offer interest income. making them a preferred long-term investment option for conservative investors.
Those who stay invested till maturity enjoy tax-free capital gains, while those opting for early redemption can meet liquidity needs without selling gold in the market.
What investors should do next Investors planning to redeem should:
- Confirm that their holdings belong to the 2018–19 Series-I tranche.
- Submit the redemption request to their bank, post office, or agent before the RBI’s cut-off date.
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