RBI sets redemption price at Rs 12,198 per unit for Sovereign Gold Bonds — Find out when it takes effect

The Reserve Bank of India on Monday announced that investors in the Sovereign Gold Bond (SGB) 2020–21 Series-I can redeem their holdings prematurely from October 28, 2025, at a redemption price of Rs 12,198 per unit.

According to the RBI statement, the price has been calculated using the simple average of the closing price of gold of 999 purity for October 23, 24, and 27, 2025, as published by the India Bullion and Jewellers Association (IBJA). The central bank issues these prices to ensure uniformity in valuation for all investors opting for redemption.

Price nearly triples since issue in 2020

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When the 2020–21 Series-I bonds were launched on October 28, 2020, investors paid Rs 4,589 per gram for online applications and Rs 4,639 per gram for offline purchases. The current redemption price of Rs 12,198 per unit reflects a nearly threefold increase in value over five years, driven by the steady rise in gold prices.

In addition to the price gain, investors have earned a 2.5 per cent annual interest, credited semi-annually. This makes the SGB a stable long-term investment compared to physical gold, offering both fixed income and capital appreciation.

Early exit option after five years

As per the RBI guidelines, investors can opt for premature redemption of Sovereign Gold Bonds after the fifth year from the date of issue, only on interest payment dates. The bonds otherwise have a full tenure of eight years, maturing on October 28, 2028, for this series.

The RBI clarified that the redemption price is linked to prevailing market rates of gold and is determined by the average closing price over the preceding three business days, as certified by IBJA. The option allows investors liquidity without the need to sell on the secondary market.

SGB scheme offers secure, tax-efficient alternative

Introduced by the Government of India in November 2015, the Sovereign Gold Bond Scheme was aimed at reducing gold imports and curbing the outflow of foreign exchange. Issued by the RBI on behalf of the Centre, the bonds are denominated in grams of gold and designed to channel household savings into financial assets rather than physical gold.

The scheme allows investors to trade the bonds on exchanges, transfer them to others, or use them as collateral for loans. The dual benefit of fixed interest and appreciation in gold prices has made the SGBs a preferred long-term investment option among retail investors.