Sovereign Gold Bonds (SGBs) have once again proven why they are considered one of the most rewarding gold investment options in India. The Reserve Bank of India (RBI) has announced the premature redemption price for SGB 2019–20 Series II, offering investors an opportunity to exit after five years with substantial gains.

These bonds were originally issued on July 16, 2019, and as per RBI rules, they are eligible for premature redemption after five years, on an interest payment date. Investors can now redeem them starting January 16, 2026.

Premature redemption price announced

The RBI has fixed the premature redemption price at ₹14,092 per unit (per gram).

How was this price calculated?

The redemption value is based on:

• The simple average of the closing price of 999 purity gold

• Prices published by the India Bullion and Jewellers Association (IBJA)

• Average taken over three working days:

  • January 12, 2026

  • January 13, 2026

  • January 14, 2026

Issue price vs redemption price: returns explained

• Issue price (offline investors): ₹3,443 per gram

• Issue price (online/digital payment): ₹3,393 per gram (₹50 discount)

• Redemption price (2026): ₹14,092 per gram

This translates to an approximate return of 315% in just five years, excluding interest income.

In simple terms, an investor who bought one unit at ₹3,393 now gets over ₹14,000—more than four times the purchase price.

Interest income: extra earnings over and above gold returns

Apart from price appreciation, SGBs also offer:

• Fixed interest of 2.5% per annum

• Interest paid every six months

• Interest calculated on the initial investment amount, not market value

The final interest installment is paid along with the redemption amount.

Important points investors must remember

• Premature redemption is allowed only on interest payment dates

• Investors must check the issue date and series of their SGBs

• Redemption requests must be submitted before the RBI deadline

• Funds are credited directly to the registered bank account

Why Sovereign Gold Bonds stand out

The Sovereign Gold Bond Scheme, operated by the Government of India through the RBI, offers several advantages:

• No storage or purity concerns like physical gold

• Backed by the Government of India

• Fixed interest income + gold price appreciation

• Tax-free capital gains at maturity (for individuals)

SGBs combine the safety of sovereign backing with the wealth-building potential of gold.