Gold Investors Earn 387% Returns as RBI Redeems 2017-18 SGB Series

Gold investors began 2026 on a high note as the Reserve Bank of India (RBI) completed the redemption of the Sovereign Gold Bond (SGB) 2017-18 Series XIV on January 1. The bond completed its full 8-year term and delivered exceptional long-term returns.

Redemption Price at ₹13,486 per Gram

The RBI fixed the final redemption price at around ₹13,486 per gram. This price was based on the average closing price of 999-purity gold published by the India Bullion and Jewellers Association (IBJA) over the last 3 business days of December 2025.

Under SGB rules, redemption prices are linked to market gold prices, allowing investors to benefit directly from price appreciation.

Nearly Fourfold Gains Over Eight Years

Investors had bought this SGB series in 2018 at an issue price of about ₹2,890 per gram. At redemption, the value rose to ₹13,486 per gram. This means an absolute price gain of around 367%. When the annual interest is included, total returns rise to nearly 387%.

On a yearly basis, this works out to an annualised return of roughly 21%, driven mainly by rising gold prices. Investors also earned 2.5% annual interest on the initial investment.

Investment Example Explained

An investment of around ₹1 lakh made at the time of issue would have grown to nearly ₹4.67 lakh on redemption. Including total interest earnings of about ₹20,000, the overall value would be close to ₹4.87 lakh.

Tax Benefits Improve Returns

SGBs also offer strong tax advantages. While the interest earned is taxable as per the investor’s income slab, capital gains on redemption are completely tax-free for individual investors. This makes SGBs more attractive than physical gold or gold ETFs from a tax perspective.

What Are Sovereign Gold Bonds?

Sovereign Gold Bonds are issued by the RBI on behalf of the central government. They are linked to gold prices and aim to reduce physical gold consumption in India. The bonds have an 8-year tenure, with an option to exit after 5 years on interest payment dates.

They can be held in demat or physical form, traded on stock exchanges, transferred, or even used as collateral for loans.

Also Read:Dubai Gold Rate: What Is the Price of 22K and 24K Gold in Dubai Today, January 2, 2026?

Conclusion

The strong returns from the 2017-18 SGB series highlight the long-term wealth creation potential of Sovereign Gold Bonds. With market-linked prices, regular interest, and tax-free capital gains, SGBs remain a smart option for investors looking to benefit from gold without holding it physically.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.