Investors who purchased Sovereign Gold Bonds (SGB) 2019-20 Series VI in October 2019 can now see the value of their investment grow significantly. The Reserve Bank of India (RBI) has set the premature redemption price at ₹14,213 per unit, compared to the original issue price of ₹3,835 per gram. This redemption price applies as of October 30, 2026, marking seven years since the bonds were issued.
- The premature redemption price is ₹14,213 per unit, with each unit representing one gram of gold.
- The original issue price was ₹3,835 per gram, with a ₹50 discount for online digital payments.
- Investors could apply for premature redemption between September 29 and October 21, 2026.
- SGBs offer an annual interest rate of 2.5%, payable semi-annually.
- Interest earned is taxable according to the investor's income tax slab.
What is the premature redemption price for SGB 2019-20 Series VI?
The RBI has fixed the premature redemption price at ₹14,213 per unit for the 2019-20 Series VI Sovereign Gold Bonds. Each unit corresponds to one gram of gold. This price reflects the appreciation in gold prices since the bonds were issued in October 2019.
How does this price compare to the original issue price?
The original issue price was ₹3,835 per gram. Additionally, investors who applied online and paid digitally received a ₹50 discount, making their effective purchase price ₹3,785 per gram. The new redemption price of ₹14,213 per unit shows a significant increase in value over the seven-year period.
When could investors apply for premature redemption?
Investors had the opportunity to apply for premature redemption between September 29 and October 21, 2026. Unfortunately, this application window has now closed, so no new premature redemption requests can be submitted.
What are the rules for premature redemption of SGBs?
According to the Government of India's notification dated September 30, 2019, investors can opt for premature redemption only after completing five years from the date of issue. The redemption must also occur on an interest payment date, which is typically semi-annual.
Do investors earn interest on SGBs?
Yes, Sovereign Gold Bonds carry an annual interest rate of 2.5% on the initial investment amount. This interest is paid semi-annually and is in addition to any gains from gold price appreciation. The interest earned is taxable based on the investor’s applicable income tax slab.
What are the tax implications of SGB investments?
The annual interest earned on SGBs is taxable as per the investor’s income tax slab. Capital gains arising from premature redemption after five years or sale on the stock exchange are also subject to taxation. Investors should consider these factors when evaluating their net returns.
How much gain does this redemption price represent?
An investor who purchased one unit at the original issue price of ₹3,835 would receive ₹14,213 upon premature redemption. This represents a price gain of ₹10,378 per unit, excluding the interest earned during the investment period. This substantial appreciation highlights the benefits of investing in gold through SGBs.
Overall, the latest redemption price for the 2019-20 Series VI Sovereign Gold Bonds demonstrates the strong performance of this investment over seven years. Investors benefited from both the rise in gold prices and the steady interest payments, making SGBs an attractive option for those seeking exposure to gold with added income.
