SGB investors score 171% return as prices jump from Rs 4,540 to Rs 12,330, gaining Rs 7,790 in 5 years

Sovereign Gold Bonds: Investors who subscribed to the Sovereign Gold Bond (SGB) 2020–21 Series II are now positioned to enjoy one of the most substantial wealth gains recorded under the scheme. The Reserve Bank of India (RBI) has fixed the premature redemption price for this tranche at Rs 12,330 per gram, applicable for the early-exit window scheduled on Wednesday, November 19, 2025. This valuation represents a remarkable appreciation of roughly 171% over the original issue price, even before including the annual interest component that SGB holders receive throughout the tenure of the bond.

When this particular series opened for subscription, investors purchasing offline paid Rs 4,590 per gram during the window that closed on November 18, 2020. Those opting for online transactions received a Rs 50 discount per gram, lowering their cost to Rs 4,540. The consistent rally in domestic gold prices over the past five years—driven by global economic uncertainty, geopolitical tensions, and strong inflationary trends—has elevated the redemption value significantly. 

The RBI determines the premature redemption price based on the simple average of the closing price of 999-purity gold published by the India Bullion and Jewellers Association (IBJA). For this exit opportunity, gold prices from November 14, November 17, and November 18, 2025, were used. Under the terms of the SGB scheme, investors may opt for premature redemption only after completing five years from the issue date, and solely on interest payout dates. This mechanism ensures structured liquidity while encouraging long-term participation.

For those redeeming now, the returns are impressive. The increase from Rs 4,540 to Rs 12,330 generates an absolute gain of ₹7,790 per gram, translating to an approximate 171.5% return without accounting for interest. Additionally, SGBs carry a fixed 2.5% annual interest, credited semi-annually to investors’ bank accounts. This combination of fixed interest and market-linked appreciation makes SGBs more rewarding than many traditional debt instruments, especially during periods of rising gold prices.

Investors choosing not to exit during this window will continue earning interest until the next redemption opportunity. They also retain the option to sell their bonds on stock exchanges, although liquidity varies across series, and pricing may differ from RBI’s official redemption value.

Sovereign Gold Bonds are designed as a superior alternative to purchasing physical gold. Issued by the RBI on behalf of the Government of India, these bonds eliminate typical concerns associated with gold ownership—such as storage costs, jewellery-related deductions, and purity verification. Their tax efficiency further enhances their appeal; capital gains arising on maturity are entirely exempt, offering significant long-term tax benefits. 

Minimum investment begins at 1 gram, with upper limits of 4 kg for individuals and HUFs and 20 kg for trusts per financial year. Eligibility extends to resident individuals, HUFs, trusts, universities, and charitable institutions, while non-residents who purchased SGBs during their residency may continue to hold them.

The scale of India’s participation in the scheme has grown consistently. Minister of State for Finance Pankaj Chaudhary reported that by March 31, 2025, the government had mobilised 146.96 tonnes of gold—valued at ₹72,275 crore—across 67 tranches. Up to June 15, 2025, investors redeemed 18.81 tonnes worth of gold-equivalent bonds. The strong performance of the 2020–21 Series II reinforces the effectiveness of SGBs as a long-term, low-risk wealth-building instrument for Indian households.