RBI Sets Rs 12,039 Redemption Price for Gold Bonds; Investors Gain 293%

The Reserve Bank of India (RBI) has set the premature redemption price for the Sovereign Gold Bond (SGB) 2018–19 Series-I at Rs 12,039 per gram. This announcement is significant for investors who hold these bonds, which were issued on May 4, 2018. The bonds have yielded an impressive return of nearly 293% since their issuance.

Eligible investors have the option to redeem their holdings early starting on November 4, 2025, in accordance with the terms of the Sovereign Gold Bond Scheme. The redemption price reflects the simple average closing price of gold of 999 purity, based on data from the India Bullion and Jewellers Association (IBJA) for the three business days preceding the redemption date—October 30, October 31, and November 3, 2025.

Understanding the Investment Returns

The SGBs were initially issued at Rs 3,064 per gram, leading to a substantial capital appreciation of approximately Rs 8,975 per gram. This return does not include the interest component, which adds further value to the investment. The bonds provide a unique investment opportunity, combining both gold price appreciation and a fixed annual interest, which is paid semi-annually.

Investors considering early redemption should be aware of the rules governing the calculation of the redemption price. According to the RBI’s guidelines, the redemption value is directly linked to the average closing price of gold as published by IBJA, ensuring that the price reflects current market conditions.

Key Considerations for Investors

Sovereign Gold Bonds have an overall maturity of eight years, but investors can opt for premature redemption after the fifth year. This feature provides liquidity while also allowing for the potential of tax-free capital gains if held until maturity.

For those looking to redeem their holdings, it is essential to verify the specific SGB tranche and issue date. Investors must also submit a premature redemption request before the RBI’s specified deadline.

Ultimately, the decision to redeem or hold longer depends on individual financial goals and market conditions. With the upcoming redemption date on November 4, 2025, investors are encouraged to weigh their options carefully.