The Reserve Bank of India has confirmed the premature redemption price for 2 Sovereign Gold Bond tranches that are eligible to exit on August 11, 2025. Holders of the 2019-20 Series IX and the 2020-21 Series V will receive ₹10,070 per gram, a figure derived from the IBJA average for 999 purity gold across the 3 business days prior to redemption.
The RBI has set the premature redemption price for Sovereign Gold Bonds at ₹10,070 per gram for the window falling on August 11, 2025. This applies to investors opting for early exit in line with the scheme rules.
The eligible tranches are 2019- 20 Series IX, issued in February 2020, and 2020 21 Series V, issued in August 2020. Both are part of the Government of India Sovereign Gold Bond programme administered by the RBI.
The redemption price of ₹10,070 per gram is based on the simple average of closing prices for 999 purity gold published by the India Bullion and Jewellers Association over the 3 business days immediately preceding the redemption date.
Investors in the February 2020 tranche have recorded a compounded annual growth rate of about 20% over five years, while the August 2020 tranche has delivered around 13.5% over the same period. These figures exclude the additional 2.5% annual interest on the issue price, which is paid semiannually and raises the effective yield.
In absolute terms, the 2019-20 Series IX shows gains of about 147%, and the 2020-21 Series V shows about 89%. These outcomes reflect the ascent in domestic gold prices since early 2020.
Gold traded around ₹4,070 per gram in February 2020, before rising to roughly ₹5,334 per gram by August 2020 as global uncertainty increased. Since then, factors such as inflation concerns, geopolitical tensions, and steady central bank demand have supported elevated prices, which is reflected in the current SGB redemption price set by the RBI.
Entry points were different. The February 2020 issue preceded the sharp rise that followed the early pandemic phase, while the August 2020 issue came after prices had already advanced. This timing difference explains the stronger CAGR for the February tranche relative to the August tranche.
The sustained rise in gold prices has prompted discussion about the long-term costs of the SGB programme, including higher redemption outgo and future obligations. These considerations are part of routine policy assessment and do not alter the published redemption mechanics for the current window.
The RBI has set ₹10,070 per gram as the premature redemption price for the SGB exit window on 11 August 2025. The calculation follows the IBJA 999 purity gold average over three preceding business days, and the returns data cited reflect capital appreciation separate from the 2.5% annual interest on the issue price.
Disclaimer: This blog has been written exclusively for educational purposes. The securities or companies mentioned are only examples and not recommendations. This does not constitute a personal recommendation or 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 securities are subject to market risks. Read all related documents carefully before investing.
Published on: Aug 11, 2025, 4:50 PM IST
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