What is the story about?
Investors in the Sovereign Gold Bond (SGB) 2018-19 Series IV are set to realise more than four-fold returns as the premature redemption window for the tranche opens on January 1, 2026.
The Reserve Bank of India has fixed the redemption price at ₹13,486 per unit for investors opting for premature redemption. The price is based on the simple average of the closing price of gold of 999 purity for the three working days preceding the redemption date—December 29, December 30 and December 31, 2025—as published by the India Bullion and Jewellers Association (IBJA).
The bonds were issued on January 1, 2019, at an issue price of ₹3,119 per gram during the subscription period from December 24 to December 28, 2018.
Investors who applied online were eligible for an additional discount of ₹50 per gram, lowering the effective purchase price further.
Under the Sovereign Gold Bond Scheme, premature redemption is permitted after the completion of five years from the date of issue, on interest payment dates.
The sharp appreciation in the redemption value reflects the rise in domestic gold prices over the seven-year period. In addition to capital appreciation, SGB investors also earn a fixed interest of 2.5% per annum, paid semi-annually, over the holding period.
Sovereign Gold Bonds are government-backed securities denominated in grams of gold and offer investors exposure to gold price movements without the need for physical storage. For individual investors, capital gains arising on redemption are exempt from tax under the scheme.
Investors who do not opt for premature redemption may continue to hold the bonds until maturity, subject to the scheme’s terms.
The Reserve Bank of India has fixed the redemption price at ₹13,486 per unit for investors opting for premature redemption. The price is based on the simple average of the closing price of gold of 999 purity for the three working days preceding the redemption date—December 29, December 30 and December 31, 2025—as published by the India Bullion and Jewellers Association (IBJA).
The bonds were issued on January 1, 2019, at an issue price of ₹3,119 per gram during the subscription period from December 24 to December 28, 2018.
Investors who applied online were eligible for an additional discount of ₹50 per gram, lowering the effective purchase price further.
Under the Sovereign Gold Bond Scheme, premature redemption is permitted after the completion of five years from the date of issue, on interest payment dates.
The sharp appreciation in the redemption value reflects the rise in domestic gold prices over the seven-year period. In addition to capital appreciation, SGB investors also earn a fixed interest of 2.5% per annum, paid semi-annually, over the holding period.
Sovereign Gold Bonds are government-backed securities denominated in grams of gold and offer investors exposure to gold price movements without the need for physical storage. For individual investors, capital gains arising on redemption are exempt from tax under the scheme.
Investors who do not opt for premature redemption may continue to hold the bonds until maturity, subject to the scheme’s terms.
