Gold Bond Investors Alert: Premature Redemption Opens, Five-Year Returns Exceed 150%
Launched on October 20, 2020, at Rs 5,051 per gram, the Series-VII bonds have provided a gain of Rs 7,741 per gram over five years, excluding the additional semi-annual interest received.
The Reserve Bank of India (RBI) has announced the premature redemption date for the Sovereign Gold Bond (SGB) 2020–21 Series-VII, giving investors a chance to realise an impressive 153 per cent return over five years.
Investors can opt for early redemption from October 20, exactly five years after the bonds were issued.
Redemption Price and Returns
The redemption price has been fixed at Rs 12,792 per gram, calculated based on the average closing gold prices of 999 purity published by the India Bullion and Jewellers Association (IBJA) between October 15 and 17, 2025.
Launched on October 20, 2020, at Rs 5,051 per gram, the Series-VII bonds have provided a gain of Rs 7,741 per gram over five years, excluding the additional semi-annual interest of 2.5 per cent per year received during the investment period.
Understanding the SGB Scheme
The Sovereign Gold Bond Scheme enables investors to gain exposure to gold without physically holding it. Each bond carries an eight-year tenure, with an option for early redemption after five years.
Beyond investment gains, investors benefit from tax incentives, as capital gains tax is exempted on redemption after maturity.
The RBI has ensured a transparent process by determining the redemption value using the average closing price of gold for the three working days before the redemption date, as published by IBJA.
This approach guarantees fair valuation directly linked to prevailing market rates.
How to Redeem Early
Investors wishing to avail of early redemption must verify the issue date and series of their SGB holdings. Requests for redemption should be submitted through banks, post offices, or agents managing the SGB accounts, strictly adhering to the RBI-specified timeline.
This announcement underscores gold’s continued appeal as a stable and lucrative long-term investment. The combination of price appreciation and interest income has reinforced SGBs as an attractive option for investors seeking both security and significant returns.
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