RBI Allows Early Exit for 2018 Gold Bonds; Investors See 304% Returns

The Reserve Bank of India (RBI) has fixed the premature redemption price for the 2018-19 Series-II Sovereign Gold Bonds (SGBs) at ₹12,704 per gram. Investors can redeem their bonds starting October 23, 2025, exactly seven years after issuance.

How the Price is Calculated

The redemption value is based on the simple average of 999-purity gold closing prices from the India Bullion and Jewellers Association (IBJA) for the 3 working days before the redemption date October 17, 20, and 22, 2025.

Investors who purchased online in 2018 received a ₹50 per gram discount, boosting their absolute returns to over 310%.

Premature Redemption Rules

Under the SGB scheme, investors can opt for early redemption after 5 years, but only on RBI-specified interest payment dates. The Series-II tranche has an 8-year tenure, and investors may also hold the bonds until maturity to enjoy capital gains tax exemption.

What Investors Should Do

• Confirm holdings belong to the 2018-19 Series-II tranche.
• Submit redemption requests through banks, post offices, or depository participants before the redemption date.
• Those who don’t redeem will continue earning 2.5% annual interest, paid semi-annually, until maturity in 2026.

Read More: RBI Fixes ₹12704 as Final Redemption Price for 2017–18 Sovereign Gold Bonds (SGB) Series-IV!

Conclusion

The early exit option offers investors a chance to lock in 304% gains, plus interest, while providing flexibility to either redeem now or continue earning tax-free interest until maturity.

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.