SGB Investors Stand To Gain 205% As RBI Sets ₹15,254 Redemption Price

Investors who bought into the Sovereign Gold Bond scheme's (SGB) 2020-21 Series-VII are sitting on returns of over 200%, as the Reserve Bank of India (RBI) opened a premature redemption window on 20 April 2026.

The redemption price of these Sovereign Gold Bonds (SGBs) has been fixed at ₹15,254 per unit, against an issue price of ₹5,051, a gain of over 202%. Investors who purchased online received a ₹50 discount at the time of issue, bringing their effective cost down to ₹5,001 and pushing returns to 205%. This is on top of the 2.5% annual interest paid semi-annually throughout the holding period.

How The Price Was Calculated

The RBI arrived at the redemption price using the simple average of gold closing prices published by the India Bullion and Jewellers Association for three business days: 15, 16 and 17 April 2026.

Important Numbers At A Glance

• Issue price: ₹5,051 per unit (₹5,001 with online discount)

• Redemption price: ₹15,254 per unit

• Return on issue price: 202%

• Return with online discount: 205%

• Annual interest rate: 2.5%, paid semi-annually

• Issue date: 20 October 2020

• Premature redemption date: 20 April 2026

How Premature Redemption Works

SGBs carry a standard tenure of eight years. The scheme does allow an early exit, though not immediately. Investors can withdraw after the fifth year, and only when interest is paid. Since this tranche came out in October 2020, it first qualified for redemption in October 2025. The upcoming eligible date is 20 April 2026.

Tax Treatment

The tax rules on SGBs changed after Budget 2026. Original subscribers who hold bonds until full maturity continue to enjoy the capital gains exemption. However, investors redeeming early or those who bought SGBs from the secondary market no longer qualify for that exemption.

Gains from assets held beyond 12 months fall under long-term capital gains and are taxed at 12.5%. If the holding period is shorter, the tax shifts to the investor’s income slab rate. Interest income, however, does not get such relief. It remains taxable at all times.

Also Read - Akshaya Tritiya Gold Buying Stays Strong Despite High Prices

Where The Scheme Stands Today

The government has not announced any new SGB tranches for FY2026-27, and no issuance calendar has been put out as of April 2026. Fresh issuances have stopped, with high borrowing costs believed to be the reason behind the pause. Investors who already hold SGBs can stay in until maturity.

Sources:

Livemint

News18