What Is the New Redemption Price Set by RBI for Gold Bonds?
Synopsis
The RBI's announcement of a redemption price of Rs 12,198 per unit for the Sovereign Gold Bond 2020-21 Series-I marks a significant milestone for investors. With the price nearly tripling since its launch, investors are now presented with a lucrative opportunity to capitalize on their investments.
Key Takeaways
Redemption price: Rs 12,198 per unit for early redemption.
Investment growth: Price has nearly tripled since issuance.
Interest earnings: Investors have earned interest over five years.
Initial prices: Rs 4,589 online and Rs 4,639 offline.
Exit option: Early redemption possible after five years.
Mumbai, Oct 28 (NationPress) The Reserve Bank of India (RBI) has set the price at Rs 12,198 per unit for the early redemption of the Sovereign Gold Bond (SGB) 2020-21 Series-I, effective October 28, 2020. Investors will have the option to redeem their SGB tranche early starting Tuesday, as indicated in an RBI announcement.
The RBI explained that this redemption price is determined by the simple average closing price of gold at 999 purity, as reported by the India Bullion and Jewellers Association (IBJA).
According to this calculation, the premature redemption price for the SGB 2020-21 Series-I, maturing on October 28, 2025, will be Rs 12,198 per unit, based on the average closing prices of gold over three business days: October 23, 24, and 27.
When this series was initially launched, online applicants paid Rs 4,589 per gram, while offline purchasers paid Rs 4,639 per gram.
At the current redemption value, the price has surged nearly three-fold over five years. Additionally, investors holding these bonds have accumulated annual interest during this period.
Currently, investors can expect an absolute return of approximately 166 percent for those who invested online.
The RBI also confirmed that early redemption of the SGB series is allowed after five years from the issuance date, coinciding with the interest payment date.
The SGB Scheme was launched by the Indian government in November 2025 as an alternative investment option in gold. The RBI issued the bonds on behalf of the Centre, denominated in grams of gold, and they provide a fixed annual interest of 2.5 percent on the issue price, along with returns from gold price appreciation.
This scheme was primarily designed to reduce gold imports, which had been draining foreign exchange reserves and widening the current account deficit. Furthermore, the bonds aim to redirect household savings into financial assets.
The bonds have a fixed tenure of eight years, but investors can exit after five years on interest payment dates. SGBs are also tradable on stock exchanges, transferable to others, or serve as collateral for loans from banks.
Point of View
The RBI's decision to set a redemption price of Rs 12,198 per unit for the Sovereign Gold Bond signifies a robust growth trajectory in gold investments. This move is beneficial not only for existing investors but also reinforces the government's strategy to channel household savings into productive assets, thereby strengthening the economy.
NationPress
10 May 2026
Frequently Asked Questions
What is the redemption price for the SGB?
The redemption price for the Sovereign Gold Bond 2020-21 Series-I is set at Rs 12,198 per unit.
When can investors redeem their SGB?
Investors can redeem their SGBs prematurely starting Tuesday, October 28, 2020.
How is the redemption price calculated?
The RBI calculates the redemption price based on the simple average closing price of gold at 999 purity as published by the IBJA.
What was the initial price of the SGB?
When first issued, online investors paid Rs 4,589 per gram, and offline investors paid Rs 4,639 per gram.
What is the duration of the SGB?
The Sovereign Gold Bonds have a fixed term of eight years, but investors can exit after five years.
