RBI’s SGB update: 2018–19 bond holders can redeem early at Rs 12,039, investors gain nearly 293%

The Reserve Bank of India (RBI) has announced the premature redemption price for the Sovereign Gold Bond (SGB) 2018–19 Series-I, which was originally issued on May 4, 2018. As per the central bank’s notification, eligible investors can opt for early redemption of their SGB holdings on November 4, 2025, in accordance with the terms of the Government of India’s Sovereign Gold Bond Scheme.

How the redemption price is calculated

The redemption value of SGBs is based on the simple average closing price of gold of 999 purity, as published by the India Bullion and Jewellers Association (IBJA), for the preceding three working days before the redemption date.

For this tranche, the redemption price has been fixed at Rs 12,039 per gram, derived from the average gold prices on October 30, October 31, and November 3, 2025.

Key features of the SGB Scheme

SGBs offer investors the dual advantage of gold price appreciation and a fixed annual interest rate, paid semi-annually. Each bond carries an eight-year maturity, but investors are allowed to seek premature redemption after the fifth year, on interest payment dates announced by the RBI.

The SGB 2018–19 Series-I was issued at ₹3,064 per gram (after an online discount of ₹50 on the nominal value of ₹3,114). Based on the latest redemption value of ₹12,039, investors who choose to redeem on November 4, 2025, would earn an absolute return of nearly 293% — excluding the periodic interest paid during the holding period.

In rupee terms, the absolute gain amounts to ₹8,975 per gram (₹12,039 – ₹3,064).

When and how to redeem your SGBs early

As per the Government of India’s notification F. No.4(8)-W&M/2018 dated April 13, 2018, premature redemption is allowed only after the fifth year from the issue date, and only on the date when interest is payable. For this tranche, that date falls on November 4, 2025.

Investors who wish to avail early redemption should follow a few key steps:

Identify the correct tranche of your bonds based on the issue date (May 4, 2018, in this case).

Submit your redemption request to the receiving office (bank branch, Post Office, Stock Holding Corporation of India Ltd (SHCIL), or RBI Retail Direct) at least 30 days before the interest payment date.

Requests will be accepted up to one day before the coupon (interest) payment date.

The proceeds will be credited directly to the investor’s bank account linked to the bond.

The RBI notes that partial redemption is also allowed in multiples of one gram, allowing investors flexibility to redeem only a portion of their holdings if required.

What if you miss the redemption window?

If an investor misses the submission window for premature redemption, they have three options:

Wait for the next eligible redemption date (as each tranche allows redemption every six months after the fifth year).

Sell the bonds in the secondary market, where they are traded on stock exchanges.

Hold the SGBs until full maturity after eight years to avail of tax-free capital gains.

Documentation required for redemption

Investors must provide proof of identity, bank account details, and, if applicable, the holding certificate during redemption. The process is designed to be simple and can be completed through the institution where the bonds were purchased.

Why premature redemption matters

SGBs have become a preferred investment vehicle for those seeking exposure to gold without the physical risks associated with storage or purity concerns. Early redemption options provide liquidity flexibility, making them attractive to long-term investors who may need to access funds before maturity.

Since their launch in 2015, Sovereign Gold Bonds have emerged as a key part of India’s financial ecosystem, helping channel household savings into formal investments while reducing reliance on imported physical gold.

By locking in an impressive 292.9% gain for SGB 2018–19 Series-I investors — excluding interest — the latest RBI announcement highlights how gold has delivered strong returns over the past seven years amid global uncertainties, inflation pressures, and volatile equity markets.

For investors looking ahead, the next redemption opportunity for this tranche on November 4, 2025, presents a chance to realise significant profits while maintaining the security and transparency that SGBs offer.