The Reserve Bank of India (RBI) has announced a major update for investors holding Sovereign Gold Bond (SGB) 2020-21 Series XI. The central bank has officially declared the premature redemption price for this bond series, which is scheduled to be redeemed early on February 9, 2026. This announcement has generated significant interest among investors, as the returns from this series have turned out to be exceptionally strong.

Typically, Sovereign Gold Bonds come with a maturity period of eight years. However, as per RBI rules, investors are allowed to opt for premature redemption after the completion of five years, on specified interest payment dates. The Series XI bonds, issued in February 2021, have now completed the minimum lock-in period, making investors eligible for early exit.

Original Issue Price of SGB 2020-21 Series XI

The SGB 2020-21 Series XI was launched in February 2021. At the time of issuance, the price was fixed at ₹4,912 per gram for investors applying through offline modes. However, those who applied online and used digital payment options received a discount of ₹50 per gram, bringing their effective purchase price down to ₹4,862 per gram.

This digital discount has played a key role in boosting the overall returns for online investors.

Premature Redemption Price Announced by RBI

According to the RBI notification, the premature redemption price for SGB 2020-21 Series XI has been fixed at ₹15,374 per unit (per gram). This price has been calculated based on the average closing price of 999-purity gold published by the India Bullion and Jewellers Association (IBJA) for the last three business days—February 4, 5, and 6, 2026.

The redemption amount will be credited directly to the registered bank accounts of eligible investors.

How Much Return Will Investors Get?

For an investor who purchased the bond online at ₹4,862 per gram, redeeming it early at ₹15,374 per gram translates into a direct capital gain of approximately ₹10,510 per gram.

In percentage terms, this means a price appreciation of nearly 216% over a five-year holding period. Importantly, this calculation does not include the interest component, which further enhances the total return.

Additional Benefit of 2.5% Annual Interest

Apart from price appreciation, Sovereign Gold Bonds offer an annual interest of 2.5%, calculated on the initial investment amount. This interest is paid semi-annually and credited directly to the investor’s bank account.

The final interest installment is paid along with the principal amount at the time of maturity or premature redemption. This feature makes SGBs unique, as physical gold does not generate any recurring income.

What Is the Sovereign Gold Bond Scheme?

The Sovereign Gold Bond scheme is issued by the Government of India and managed by the RBI. It serves as a secure alternative to physical gold, eliminating concerns related to storage, purity, and theft.

Investors benefit from:

• Capital appreciation linked to gold prices

• Fixed annual interest income

• No risk of gold adulteration

• Option for premature redemption after five years

How Is the SGB Price Determined?

The price of Sovereign Gold Bonds is fixed in Indian rupees and is linked to the market price of gold. It is calculated using the average closing price of 999-purity gold, as published by IBJA, for the three business days preceding the relevant date.

This transparent pricing mechanism ensures fair valuation for both issuance and redemption.

Overall, the SGB 2020-21 Series XI has emerged as one of the most rewarding gold-linked investments in recent years, combining strong price gains with steady interest income.