RBI's sovereign gold bond update: SGB 2020-21 Series-I redemption price set at Rs 12,198; investors to earn nearly 166% return

Sovereign Gold Bond investors are in for hefty gains as the Reserve Bank of India (RBI) has fixed the premature redemption price for the 2020-21 Series-I at Rs 12,198 per gram, marking a 166% rise from the original issue price of Rs 4,589.The redemption option opens five years after issue, on an interest payment date, as per the Sovereign Gold Bond Scheme guidelines, according to an ET report. The tranche was originally issued on April 28, 2020, under the Government of India’s F.No. 4(4)-B(W&M)/2020 notification.

How the SGB redemption value is calculated

The RBI determines the redemption price using the simple average of gold prices (999 purity) published by the India Bullion and Jewellers Association (IBJA) for the three working days preceding the redemption date.For this tranche, the average closing prices from October 23, 24, and 27, 2025 were used, fixing the redemption rate at Rs 12,198 per unit.

Big returns for investors in SGB 2020-21 Series-I

The SGB 2020-21 Series-I was issued at Rs 4,589 per gram online and Rs 4,639 offline, translating to an absolute gain of Rs 7,609 per gram on premature redemption. In percentage terms, this equals a 165.8% return before interest is added.SGBs also offer an annual 2.5% interest, credited semi-annually, with the final payout made along with principal redemption.

What investors should do before redemption

Investors opting for early redemption must:

SGBs, which mature in eight years, offer the flexibility of premature exit after five years, combining the benefits of gold price appreciation with fixed interest and sovereign security.