Synopsis: The Reserve Bank of India (RBI) has announced the premature redemption price of Rs 10,610 per unit for Sovereign Gold Bonds (SGB) 2020-21 Series VI, giving investors over 107% returns in five years. Investors can opt for redemption on September 6, 2025.
The Reserve Bank of India (RBI) has fixed the premature redemption price for Sovereign Gold Bonds (SGB) 2020-21 Series VI at Rs 10,610 per unit, nearly doubling investors’ money in just five years. These bonds, originally issued on September 8, 2020, at Rs 5,117 per gram, will be eligible for redemption on September 6, 2025, since September 7 and 8 fall on holidays.
The Sovereign Gold Bond scheme, launched by the Government of India and managed by the RBI, is considered a safe investment alternative to physical gold. It not only avoids storage and purity issues but also provides an annual interest of 2.5 percent, payable semi-annually.
Key Details:
- Issue Price (2020): Rs 5,117 per gram
- Premature Redemption Date: September 6, 2025
- Redemption Price: Rs 10,610 per unit
- Absolute Returns: 107.35% (excluding interest)
- Capital Gain per Unit: Rs 5,493
The redemption value is calculated based on the simple average of closing gold prices (999 purity) of the last three business days, as published by the India Bullion and Jewellers Association Ltd (IBJA).
Alongside capital appreciation, investors have also earned interest payouts during the holding period. At maturity or redemption, the final interest installment will be paid along with the principal.
What Investors Should Do:
- Verify the issue date of their SGBs.
- Submit a redemption request as per the RBI’s redemption schedule.
- Consider that premature redemption is permitted only after the 5th year, on interest payout dates.
Experts suggest that with gold prices expected to remain strong amid global uncertainties, SGBs continue to be an attractive investment option for long-term wealth creation.
Disclaimer: This article is for informational purposes only and should not be taken as financial advice. Investors are advised to consult certified financial advisors before making any investment or redemption decisions.
