Scheduled for today i.e. April 28, 2025, the Reserve Bank of India (RBI) had announced the premature redemption price for the Sovereign Gold Bond (SGB) Scheme, Series I of 2020-21 at Rs 9,600 per unit. This amounts to an exorbitant gain of 107 per cent in comparison to the issue price of Rs 4,639 for retail investors. For other investors who invested in the security through the online route, the investors will reap a significant 109 per cent return.

Rules concerning SGB redemption

As per the FAQs on SGB redemption on the RBI website, even though the tenor of the bond is 8 years, early encashment/redemption of the bond is allowed after the fifth year from the date of issue on coupon payment dates. The bond will be tradable on exchanges, if held in demat form. It can also be transferred to any other eligible investor, it added.

Accordingly, the premature redemption for this particular series of SGB falls on April 28, 2020.

What are Sovereign Gold Bonds?

Sovereign gold bonds were introduced in the year 2015 to channelize households spending on physical gold to financial investment in gold (i.e. risk risk-free in respect of theft and other hassles such as storage cost) and also offered an attractive rate of interest.