Investors In 2019-20 Series I Sovereign Gold Bonds to Gain 333% on Premature Redemption

Investors in the 2019-20 Series I Sovereign Gold Bonds (SGBs) are set to receive gains of around 333%, excluding interest payouts, on premature redemption scheduled for December 11. The redemption price has been fixed at ₹12,801 per unit, based on the simple average of closing gold prices on December 8, 9 and 10, 2025, as published by the India Bullion and Jewellers Association Ltd (IBJA).

These bonds were originally issued on June 11, 2019, at significantly lower prices. The sharp increase in gold prices over the years has resulted in substantial returns for investors opting for early exit.

Redemption Price and Calculation

The redemption price of ₹12,801 per unit is determined using the average of gold prices from the three preceding working days. This calculation method ensures transparency and reflects prevailing market conditions.

Premature redemption is permitted after the fifth year from the date of issue, coinciding with interest payment dates. Investors who submitted redemption requests will receive proceeds directly into their linked bank accounts on the scheduled date.

Historical Context and Comparison

The 2019-20 Series I bonds were issued at ₹3,214 per gram for offline investors and ₹3,164 per gram for online purchases. For context, the SGB 2017-18 Series XI was issued at ₹2,952 per gram offline and ₹2,902 per gram online.

These figures highlight the consistent rise in gold prices over recent years, which has significantly boosted returns for long-term investors. The Sovereign Gold Bond Scheme was introduced to provide an alternative to physical gold while offering tax benefits and interest income.

Investor Options And Liquidity

Investors who did not opt for premature redemption will need to wait until the next available exit date or sell their bonds on stock exchanges. Liquidity on exchanges varies, and prices may differ from the official redemption value. The scheme allows retail investors to earn returns linked to gold prices along with a fixed interest component. Maturity proceeds are exempt from capital gains tax if the bonds are held until the end of the tenure, making them an attractive long-term investment option.

Government Mobilisation and Redemptions

According to Minister of State for Finance Pankaj Chaudhary, the government mobilised around 146.96 tonnes of gold worth ₹72,275 crore through 67 tranches as of March 31, 2025. Up to June 15, 2025, investors redeemed 18.81 tonnes worth of gold-equivalent bonds.

These figures underline the growing popularity of SGBs among Indian investors seeking exposure to gold without physical storage concerns. The scheme continues to play a key role in reducing reliance on imported gold and promoting financial instruments linked to bullion.

Read More: Best Gold Stocks in India for December 2025.

Conclusion

The premature redemption of 2019-20 Series I SGBs offers investors substantial gains, reflecting the strong performance of gold over the past 6 years. With a redemption price of ₹12,801 per unit, the bonds have delivered returns far exceeding traditional fixed-income instruments.

Investors who remain invested can benefit from continued price appreciation and tax advantages at maturity. The Sovereign Gold Bond Scheme remains a strategic tool for both wealth creation and reducing physical gold demand in India.

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.