The Reserve Bank of India (RBI) has announced the premature redemption price for Sovereign Gold Bond (SGB) 2019-20 Series V at ₹14,725 per gram. This price is nearly four times the original issue price of ₹3,788 per gram, or ₹3,738 for investors who applied online and paid digitally. The redemption date is October 15, 2026, and the window for submitting premature redemption requests closed on October 5, 2026.
- The redemption price is ₹14,725 per gram based on the average gold price over three business days.
- Regular investors gain ₹10,937 per gram excluding interest and taxes.
- Online investors who paid digitally gain ₹10,987 per gram excluding interest and taxes.
- An investment of ₹1 lakh at issue price would be worth nearly ₹3.89 lakh at redemption.
- Premature redemption is allowed after five years from issue date on interest payment dates.
What is the premature redemption price for SGB 2019-20 Series V?
The RBI fixed the premature redemption price at ₹14,725 per gram. This price is calculated as the simple average of the closing price of 999-purity gold over the three business days before October 15, 2026, specifically October 12, 13, and 14, 2026. The prices are published by the India Bullion and Jewellers Association Ltd. (IBJA).
How much gain do investors make compared to the original price?
Investors who bought the bonds at the original issue price of ₹3,788 per gram stand to gain ₹10,937 per gram at redemption, excluding interest and taxes. Those who purchased online at the discounted price of ₹3,738 per gram gain ₹10,987 per gram. This means the capital gain is approximately 288.8% for regular investors and about 294% for online investors.
Can you provide an example of the returns on investment?
For example, an investor who purchased SGBs worth ₹1,00,000 at ₹3,788 per gram would have bought approximately 26.40 grams of gold. At the redemption price of ₹14,725 per gram, the investment value becomes approximately ₹3,88,806. This results in a capital gain of ₹2,88,806, or nearly 3.9 times the original investment, excluding interest and taxes.
When is premature redemption allowed under the Sovereign Gold Bond Scheme?
Premature redemption is permitted only after the fifth year from the date of issue and on an interest payment date. Since this tranche was issued on October 15, 2019, the earliest premature redemption date is October 15, 2026. Investors had to submit their redemption requests by October 5, 2026, to be eligible.
How is the redemption price determined?
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. These prices are published by the India Bullion and Jewellers Association Ltd. (IBJA), ensuring transparency and accuracy in valuation.
