205% Returns! RBI Sets Redemption Price for Sovereign Gold Bond 2018–19 Series-V; Here’s How You Can Cash Out

Investors in the Sovereign Gold Bond (SGB) 2018-19 Series-V have much to cheer about as the Reserve Bank of India (RBI) announced a redemption price of Rs 9,820 per gram for premature exit, marking an impressive return of over 205% on the initial investment.

These bonds, issued in January 2019 at Rs 3,214 per gram, have completed the minimum holding period of five years, making them eligible for early redemption.

SGB 2018-19 Series-V: Massive Gains on Early Redemption

The redemption price of Rs 9,820 offers an absolute gain of Rs 6,606 per gram, translating into a 205.56% return, excluding the fixed interest payments investors have received over the years.

The RBI's pricing formula is based on the simple average of gold prices with 999 purity, as published by the India Bullion and Jewellers Association Ltd, for the last three business days which are in this case, July 17, 18, and 21, 2025.

Apart from the capital gains, SGB investors have earned an annual fixed interest of 2.5% on the original issue price. Paid semi-annually, the interest has been directly credited to investors' bank accounts. The final interest payout will accompany the principal amount upon redemption. This interest component further enhances the total effective yield for bondholders.

How to Redeem Sovereign Gold Bonds Early?

Though SGBs have an 8-year maturity period, early redemption is permitted after five years but only on interest (coupon) payment dates. To redeem bonds prematurely, investors must submit a request to the respective bank, SHCIL office, post office, or authorized agent at least one day before the interest payment date, keeping in mind a 30-day prior notice requirement.

Gold Bonds Offer Safe, Tax-Efficient Investment Option

Sovereign Gold Bonds provide several advantages over holding physical gold. They eliminate storage risks, offer assured annual interest, and are exempt from capital gains tax if held until maturity. Additionally, these bonds are tradable on stock exchanges in demat form and can be transferred to other eligible investors, providing flexibility and liquidity.

This announcement comes shortly after RBI declared a redemption price of Rs 9,791 per gram for the SGB 2019-20 Series-II, offering a 184% return for investors opting for early exit on July 16, 2025.

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