Premature redemptions of the Sovereign Gold Bonds 2020-21 Series-IV on July 14 will fetch investors nearly double returns, as RBI announces robust payout based on recent gold prices.
July 12, 2025: The Reserve Bank of India (RBI) has announced a ₹9,688 redemption price per unit for the Sovereign Gold Bonds (SGBs) 2020-21 Series-IV, translating into an impressive 99.67% return for early investors. The payout is applicable to premature redemptions scheduled for July 14, 2025, offering significant capital appreciation over the five-year holding period.
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The redemption price has been calculated based on the simple average of the closing price of gold of 999 purity over the last three business days, as reported by the India Bullion and Jewellers Association Ltd (IBJA), the RBI confirmed in its July 11 release.
What are Sovereign Gold Bonds?
Issued by the RBI on behalf of the Government of India, SGBs are government securities denominated in grams of gold, serving as a safer, paper-based alternative to physical gold. Investors buy these bonds at an issue price and receive redemption value in cash upon maturity.
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Aside from capital appreciation, SGBs offer 2.5% annual interest, paid semi-annually, providing a steady income stream throughout the eight-year tenure. For the current series, the impressive return reinforces their appeal amid market volatility.
Strong Performance Despite Discontinuation
While the Indian government discontinued new SGB issuances last year, existing bondholders continue to benefit. The ₹9,688 redemption price reflects a near doubling from the original issue price, highlighting the dual benefits of capital gains and government-backed security.
Investors are reminded to ensure their bank and contact details are updated with the issuing institution to avoid delays in receiving their redemption proceeds. RBI mandates a one-month prior notification for premature redemptions, which are available from the fifth year onward.
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SGBs vs Physical Gold
Promoted as part of the government’s broader agenda to reduce gold imports and stabilize the trade deficit, SGBs offer an efficient, secure, and storage-free alternative to physical gold. With no concerns over purity, theft, or making charges, these bonds have emerged as a preferred vehicle for long-term gold-linked investment.
A Profitable, Strategic Investment
In a financial environment marked by uncertainty, SGBs continue to demonstrate resilience, offering investors a lucrative blend of safety, returns, and regular income. As gold prices remain buoyant, the current redemption rates further validate the strategy of investing in SGBs for wealth preservation and growth.
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