The Reserve Bank of India (RBI) has revealed the premature redemption price for Sovereign Gold Bond (SGB) 2020-21 Series-I, originally issued on April 28, 2020. As per the central bank’s announcement, investors holding this tranche can opt for early redemption starting April 28, 2026, in line with the scheme’s provisions. Under the rules governing Sovereign Gold Bonds, premature redemption is allowed only after a lock-in period of five years. This redemption can be exercised on specific interest payout dates. For this particular series, April 28, 2026, marks the first opportunity for investors to exit before maturity.
The redemption value is not arbitrary but follows a defined calculation method. It is based on the simple average of the closing prices of 999 purity gold, as published by the India Bullion and Jewellers Association (IBJA), over the previous three working days. This ensures that the payout reflects prevailinggoldmarket trends.
For the April 2026 redemption, the price has been fixed at Rs 15,124 per unit. This figure is derived from gold prices recorded on April 23, April 24, and April 27, 2026.
The returns from this SGB tranche highlight the strong performance of gold over the past few years. The bonds were initially offered at Rs 4,589 per gram for online buyers, while offline investors paid Rs 4,639 per gram, with a Rs 50 discount available for digital purchases.
At the current redemption price, investors are looking at an absolute gain of Rs 10,535 per unit (excluding interest). In percentage terms, this translates to roughly 230 per cent returns.
To put this into perspective, an investment of Rs 1 lakh in April 2020 would now be worth about Rs 3.30 lakh based on the premature redemption price. This figure does not include the additional 2.5 per cent annual interest paid on the principal.
Understanding Sovereign Gold Bonds
Sovereign Gold Bonds are government-backed securities denominated in grams of gold, offering an alternative to physical gold ownership. These bonds are issued by the RBI on behalf of the Government of India. Investors pay the purchase amount in cash and receive the redemption proceeds in cash as well.
The scheme allows a minimum investment of 1 gram. The maximum limit is capped at 4,000 grams for individuals and Hindu Undivided Families, while trusts and similar entities can invest up to 20,000 grams annually. These limits include both primary purchases and secondary market acquisitions.
Interest Earnings And Issuance Details
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