SGB premature exit date on November 2, 2026: Rs 1 lakh invested in this Sovereign Gold Bond grows to Rs 3 lakh in 5 years

The Reserve Bank of India (RBI) has announced the premature redemption price for (SGB 2021-22 Series VII - Issue date November 02, 2021). According to a statement from the RBI, gold bond investors will have the option to redeem this SGB tranche prematurely from November 2, 2026.

The premature redemption of the SGB series is permitted after the fifth year from the date of the issue of such gold bonds on the date on which interest is payable, as per the statement from the RBI.

How is the SGB redemption price calculated?

The gold bond series’ redemption value is calculated based on the simple average closing price of the gold of 999 purity published by the India Bullion and Jewellers Association (IBJA) for the preceding three working days, the RBI statement further said.


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What is the premature redemption price for SGB 2021-22 Series VII due on November 2, 2026?

The premature redemption price due on November 2, 2026, has been fixed at Rs 14,167 per unit of the SGB, based on the simple average of the closing price of gold for the last three business days, i.e., October 28, October 29 and October 30, 2026.

The SGB 2021-22 Series VII was issued at Rs 4,715 per gram for online bonds. It will yield an absolute simple return of nearly % on the date of the premature redemption.

The absolute return is Rs 14,167 - Rs 4,715 = Rs 9,452 (without factoring in the interest). In percentage terms, it is (₹9,452 ÷ ₹4,715 ) × 100 = 200.47%

A nearly 200.47% absolute return means that an investment of Rs 1 lakh in this SGB series at the time of its launch would be worth a little over Rs 3 lakh today, including the initial investment and returns, excluding any interest earned.

For investors who bought SGBs of the same series offline, the issue price was Rs 4,765 per gram of gold. A Rs 50 discount was available on the online purchase of these SGBs.

Important frequently asked questions (FAQs) about SGBs as per the RBI website-

What is a Sovereign Gold Bond (SGB)? Who is the issuer?

SGBs are government securities denominated in grams of gold. They are substitutes for holding physical gold. Investors have to pay the issue price, and the bonds are redeemed and paid back to investors on maturity. The gold bond is issued by the RBI on behalf of the central government.

What is the rate of interest SGB investors get on their investment and how is the interest paid?

The bonds bear interest at the rate of 2.50% (fixed rate) per annum on the amount of the initial investment. However, SGBs issued in FY 2015-16 offered an interest rate of 2.75%.

Interest is credited semi-annually to the bank account of an investor, and the last interest is payable on the bond’s maturity along with the principal.