SGB 2019 investors can redeem at ₹15,102: How much profit will you make if withdraw prematurely?

Investors in the Sovereign Gold Bond (SGB) 2018-19 Series VI can opt for premature redemption at ₹15,102 per unit on August 12, 2026. The tranche was originally issued at ₹3,276 per gram for investors who applied online and paid through digital modes, giving them a ₹50 discount over the base issue price of ₹3,326.

At the latest redemption price, the value of the SGB has risen more than 4.6 times from its effective issue price. However, the actual return is higher because SGB investors also receive fixed interest of 2.5% per annum on the original investment.

How much profit will you make?

The capital gain can be calculated by subtracting the original issue price from the premature redemption price.

Original issue price: ₹3,276 per unit
Premature redemption price: ₹15,102 per unit

Capital gain = ₹15,102 − ₹3,276 = ₹11,826 per unit

The capital appreciation in percentage terms is:

₹11,826 ÷ ₹3,276 × 100 = 360.99%

So, the SGB has generated an absolute capital gain of about 361%, excluding interest.

For example, an investor who bought SGBs worth ₹1 lakh at the effective issue price of ₹3,276 per gram would have acquired approximately 30.52 units.

At ₹15,102 per unit, those bonds would now be worth approximately:

30.52 × ₹15,102 = ₹4.61 lakh

Thus, an investment of ₹1 lakh would have appreciated to around ₹4.61 lakh through the gold-linked value alone.

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But there is another return: 2.5% interest

The 361% capital appreciation does not include the interest paid by the government.

SGBs carry a fixed interest rate of **2.5% per annum**, calculated on the original investment amount rather than the prevailing market value of gold. The interest is paid every six months directly to the investor's bank account.

For an investor who held the bond from February 12, 2019, to August 12, 2026, the holding period is seven-and-a-half years.

On one unit bought at ₹3,276:

Annual interest = ₹3,276 × 2.5% = ₹81.90

Over 7.5 years:

Total interest = ₹81.90 × 7.5 = ₹614.25 per unit

Therefore, the combined value received from the SGB, ignoring tax implications and assuming all scheduled interest payments were received, would be approximately:

Redemption value: ₹15,102
Interest received: ₹614.25
Total = ₹15,716.25 per unit

This means the total monetary gain over the original ₹3,276 investment would be approximately ₹12,440 per unit, before considering the tax treatment of interest.

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Why is the redemption price ₹15,102?

The Reserve Bank of India calculates premature redemption using the **simple average of the closing price of 999-purity gold for the three preceding business days**, as published by the India Bullion and Jewellers Association (IBJA).

For the August 12 redemption, the reference dates were August 7, August 10 and August 11, 2026.

The ₹15,102 price therefore reflects the prevailing gold prices used under the SGB redemption formula.

Who can redeem now?

SGBs normally have an eight-year maturity. However, premature redemption is permitted after completion of five years from the issue date, and it can be exercised on an interest-payment date.

The 2018-19 Series VI was issued on February 12, 2019, making August 12, 2026 an eligible premature redemption date.

Investors should note that ₹15,102 applies only to this particular SGB tranche and redemption window. Other SGB series will have different redemption dates and prices.

The 361% figure is also an absolute capital appreciation figure, not an annualised return. The interest component is an additional return and should be considered separately when assessing the investment's overall performance.

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