New Delhi, August 14, 2026 (Yes Punjab News)
Investors in the Sovereign Gold Bond (SGB) 2019-20 Series III are set to receive a substantial return as the Reserve Bank of India (RBI) has fixed the premature redemption price at Rs 15,310 per unit, compared with the original issue price of Rs 3,449 per gram for investors who applied online.
The redemption option is available from August 14, 2026, seven years after the bonds were issued on August 14, 2019.
At the revised redemption price, investors have gained Rs 11,861 per unit, translating into an absolute capital appreciation of about 343.9 per cent over the issue price. This calculation excludes the interest received during the holding period.
The redemption price is based on the simple average of the closing prices of 999-purity gold for the three business days preceding the redemption date — August 11, 12 and 13 — as published by the India Bullion and Jewellers Association (IBJA).
For example, an investment of Rs 1 lakh at the online issue price would have purchased about 28.99 units. At Rs 15,310 per unit, the holding would be worth approximately Rs 4.44 lakh upon premature redemption, representing a gain of around Rs 3.44 lakh before interest.
Based solely on the increase in the redemption value, the investment’s annualised return works out to approximately 23.7 per cent over seven years.
In addition to the appreciation linked to gold prices, SGB investors receive fixed interest of 2.5 per cent annually on the original investment, paid twice a year. The interest is separate from the capital gain.
Under the RBI’s SGB framework, the bonds have an eight-year maturity, while premature redemption is permitted after completion of the fifth year from the issue date, subject to redemption being exercised on an interest payment date.
Investors in the 2019-20 Series III were informed of the premature redemption facility as part of the terms and conditions applicable when the bonds were issued.
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