Investors holding the Sovereign Gold Bond (SGB) 2020-21 Series-IV will be eligible for premature redemption on July 14. The Reserve Bank of India (RBI) has set the redemption price at ₹9,688 per gram.The SGB 2020-21 Series-IV was issued at ₹4,852 per gram in July 2020. This means investors will earn an absolute return of ₹4,836 per gram (₹9,688 minus ₹4,852) over five years. In percentage terms, this works out to a return of about 99.67% on the principal amount, excluding the additional annual interest of 2.5% paid every year.The redemption price is based on the simple average of the closing gold price of 999 purity for the three business days — July 9, 10, and 11 — as published by the India Bullion and Jewellers Association Ltd (IBJA).
Investors can redeem these bonds prematurely only after the fifth year from the date of issue, on an interest payment date. The next due date for this series is July 14, 2025.Investors who fail to submit the redemption request by the due date will have to wait until the next half-yearly interest payout date. This typically occurs every six months from the issue date.
Premature redemption must be routed through the original mode of purchase, such as demat account, bank, or post office, and requires submission of the request at least 10 days in advance of the interest date.It must be noted that the government in Union Budget 2025 discontinued fresh issuances of the Sovereign Gold Bond scheme.However, existing bonds remain active and will be redeemed on schedule or on eligible early redemption dates.
