NEW DELHI, Aug 8: Investors in the Sovereign Gold Bond (SGB) 2020-21 Series-XI have received an opportunity to exit their holdings prematurely after the Reserve Bank of India allowed redemption of the bonds from August 7, 2026.
The bond series was originally issued on February 9, 2021, and became eligible for premature redemption after completing five years. Under the RBI framework, such redemption is permitted on an interest payment date after the fifth year of issuance.
The latest redemption option has attracted attention because the investment has generated substantial appreciation since its issuance. An investment of Rs 1 lakh in the bond has grown to nearly Rs 3 lakh, representing a return of around 200%, according to the reported redemption calculation.
The premature redemption value is determined using the average closing price of gold of 999 purity published by the India Bullion and Jewellers Association for the three preceding business days.
Sovereign Gold Bonds are government securities issued by the Reserve Bank on behalf of the Government of India. They allow investors to gain exposure to gold prices without physically holding the metal.
The bonds also carry a fixed interest rate of 2.5% per annum, with interest paid twice a year. Individual investors and Hindu Undivided Families can hold up to 4 kg of SGBs in a financial year, while trusts and eligible entities can invest up to 20 kg.
The latest redemption window offers an exit route for eligible investors while highlighting the strong gains delivered by gold-linked investments over the five-year holding period.