The Reserve Bank of India (RBI) has announced the premature redemption price for Sovereign Gold Bond (SGB) 2020-21 Series IV. Investors in this tranche can opt for premature redemption from July 14, 2026, in accordance with the SGB scheme rules.
The redemption facility becomes available after the completion of 5 years from the issue date and on an interest payment date. The latest redemption price highlights the significant appreciation in gold prices since the bonds were issued in 2020.
The RBI has fixed the premature redemption price of SGB 2020-21 Series IV at ₹14,307 per unit. This redemption will be available on July 14, 2026, for eligible investors who wish to exit before the bond's maturity.
As per the RBI framework, premature redemption is permitted only after the fifth year from the issue date and on specified interest payment dates. The bond series was originally issued on July 14, 2020, making July 14, 2026, the first eligible premature redemption date for this tranche.
The redemption value of SGBs is linked to prevailing gold prices. RBI calculates the redemption amount based on the simple average closing price of gold of 999 purity published by the India Bullion and Jewellers Association (IBJA) during the preceding 3 working days.
For this redemption cycle, the calculation was based on gold prices recorded on July 9, 2026, July 10, 2026, and July 13, 2026. This methodology ensures that the redemption value reflects recent market prices of gold.
The online issue price of SGB 2020-21 Series IV was ₹4,802 per gram, while offline investors paid ₹4,852 per gram. Based on the redemption price of ₹14,307, investors who purchased the bonds online have earned an absolute gain of ₹9,505 per unit, excluding interest income.
This translates into an absolute return of approximately 197.94%. An investment of ₹1 lakh in this series at issuance would now be valued at around ₹2.98 lakh based on the redemption price alone, excluding the annual interest payments received during the holding period.
Sovereign Gold Bonds are government securities denominated in grams of gold and serve as an alternative to holding physical gold. The bonds are issued by the RBI on behalf of the Government of India and are redeemed in cash.
Most SGB issuances carry a fixed interest rate of 2.5% per annum on the initial investment amount. This interest is credited semi-annually to the investor’s bank account, with the final interest payment made alongside the principal amount at redemption or maturity.
Read More: Best Gold Mutual Funds in India.
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The RBI's announcement of a premature redemption price of ₹14,307 for SGB 2020-21 Series IV reflects the substantial rise in gold prices over the past 6 years. Investors who subscribed to the bond at issuance have recorded significant capital appreciation in addition to earning fixed annual interest.
The redemption value has been determined using RBI's standard formula based on recent IBJA gold prices. The update provides eligible investors with an opportunity to assess their holdings as the tranche becomes available for premature redemption on July 14, 2026.
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.
Published on: Jul 14, 2026, 11:56 AM IST
Akshay Shivalkar
Akshay Shivalkar is a financial content specialist who strategises and creates SEO-optimised content on the stock market, mutual funds, and other investment products. With experience in fintech and mutual funds, he simplifies complex financial concepts to help investors make informed decisions through his writing.
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