240% return on redemption of these Sovereign Gold Bonds

The Reserve Bank of India ( RBI) has announced the premature redemption price for Sovereign Gold Bonds (SGB) 2017-18 Series-XIV and SGB 2018-19 Series-IV, due today, July 1, 2025, The tenure of gold bonds is 8 years and premature redemption of SGBs is permitted only after the fifth year from the date of issue.

How is SGB redemption price calculated?
According to an RBI press release dated June 30, 2025, “The redemption price of SGB shall be based on the simple average of closing gold price of 999 purity of previous three business days from the date of redemption, as published by the India Bullion and Jewellers Association Ltd (IBJA).

What is the redemption price of (SGB) 2017-18 Series-XIV and SGB 2018-19 Series-IV
The redemption price for premature redemption due on July 01, 2025, shall be Rs 9,628 per unit of SGB based on the simple average of closing gold price for the three business days i.e., June 26, June 27, and June 30, 2025.

SGB 2017-18 Series XIV
The SGB 2017-18 Series XIV, issued at Rs 2,831 per gram in January 2018, has yielded a return of nearly 240%.

SGB 2018-19 Series IV
For the SGB 2018-19 Series IV, issued at Rs 3,119 in January 2019, the increase is over 208% if the investor opts for premature withdrawal.

This particular SGB 2018-19 Series IV was issued at Rs 3,119 per gram in January 2019. So, the absolute return comes to Rs 9,628-3,119= Rs 6,509 (without factoring in the interest). In percentage terms, it comes to Rs {(9628/3119*100} %= 208.69%

Note that the above rates exclude the annual 2.5% interest.

Interest payment
The bonds bear interest at the rate of 2.50% (fixed rate) per annum on the amount of initial investment. Interest will be credited semi-annually to the bank account of the investor and the last interest will be payable on maturity along with the principal

What investors need to do for premature redemption
Investors holding SGBs should review the redemption schedule carefully. Some of the Key actions include:
a) Identify the tranche to which your bonds belong by checking the issue date. This is the date when the bonds can be redeemed before maturity.
b) Ensure that your request for premature redemption is submitted by the deadline mentioned in the schedule.

What are the procedures involved during premature redemption?
The investor will be advised one month before maturity regarding the ensuing maturity of the bond. On the date of maturity, the maturity proceeds will be credited to the bank account as per the details on record.
In case there are changes in any details, such as bank account numbers and email IDs, then the investor must inform the bank/SHCIL/PO promptly.