SGB premature redemption date today: Amid record gold prices, this bond has turned Rs 1 lakh investment into Rs 4.15 lakh

The Reserve Bank of India (RBI) has announced the premature redemption price for Sovereign Gold Bond (SGB) 2019-20 Series-II-Issue date July 16, 2019. According to a statement from the Central Bank, investors will have the option to redeem this SGB tranche prematurely from January 16, 2026 (Friday). The premature redemption of the SGB series may be permitted after the fifth year from the date of issue of such gold bonds on the date on which interest is payable, as per the RBI statement.

How is SGB redemption price calculated?

The redemption value will be 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, as per the rule.

Also read: SGB premature redemption date today: Sovereign gold bond turns Rs 1 lakh investment into Rs 2.90 lakh; check details

What is the redemption price for SGB 2019-20 Series-II?

The redemption price for premature redemption due on January 16, 2026, will be Rs 14,092 per unit of SGB based on the simple average of the closing price of gold for the three business days, i.e., January 12, 2026, January 13, 2026, and January 14, 2026.

SGB 2019-20 Series-II issue price

The SGB 2019-20 Series-II was issued at Rs 3,443 per gram for offline investors. Online investors received a discount of Rs 50 per gram when applied and paid through digital mode. For such investors, the issue price of the Gold Bond was 3,393 per gram.

How much return did investors get from the premature redemption of their investments in SGB 2019-20 Series-II?

Since SGB 2019-20 Series-II was issued at Rs 3,393 per gram on July 16, 2019, it will yield an absolute simple return of nearly 315% on the date of premature redemption.

The absolute return comes to Rs 14,092-Rs 3393 = Rs 10,699 (without factoring in the interest). In percentage terms, it is 10,699 ÷ 3,393× 100 = 315.3%.

SGB interest payment

SGBs offer an interest rate of 2.50% (fixed rate) per annum on the initial investment amount. The interest amount is credited semi-annually to the bank account of the SGB investor. The last interest instalment is payable on maturity along with the principal.

What investors need to do for the premature redemption of SGBs?

Investors holding SGBs should review the redemption schedule carefully. Some of the key actions include:

a) Identify the tranche to which your bonds belong by checking the issue date.

b) Ensure that your request for premature redemption is submitted by the deadline mentioned in the schedule.

Sovereign Gold Bond (SGB) scheme details

The Sovereign Gold Bond (SGB) scheme, managed by the RBI on behalf of the Government of India, offers a secure, paper/demat alternative to holding physical gold, eliminating storage and purity concerns while paying a 2.5% annual interest. The premature redemption of SGBs is allowed after 5 years from the date of their issue on interest payout dates.