Redemption Price for Premature Redemption of SGB 2020-21 Series-IV Announced

The Government of India has announced the redemption price for premature redemption of Sovereign Gold Bonds (SGB) 2020-21 Series-IV, which falls due on January 14, 2026. This tranche was originally issued on July 14, 2020, under the Sovereign Gold Bond Scheme.

As per the scheme guidelines, premature redemption is permitted after the fifth year from the date of issue on interest payment dates. The redemption price is calculated based on the average closing price of gold of 999 purity for the previous three working days.

Regulatory Framework and Compliance

The redemption process adheres to the Government of India notification F.No.4(4)-B(W\&M)/2020 dated April 13, 2020. Under this framework, investors are allowed to redeem their bonds prematurely after five years from the issue date, provided it coincides with an interest payment date.

The due date for this tranche is January 14, 2026, marking the first eligible redemption window since issuance. This mechanism ensures compliance with SEBI’s disclosure norms and maintains transparency for bondholders.

Calculation Of Redemption Price

The redemption price for SGB 2020-21 Series-IV has been fixed at ₹13,929 per unit. This figure is derived from the simple average of the closing price of gold of 999 purity published by the India Bullion and Jewellers Association Ltd (IBJA).

The calculation considers prices from January 09, January 12, and January 13, 2026. This pricing method ensures that the redemption value reflects prevailing market conditions and provides a fair exit option for investors.

Key Dates and Historical Context

The SGB 2020-21 Series-IV was issued on July 14, 2020, as part of the Government’s initiative to offer an alternative investment linked to gold prices. The scheme allows premature redemption after five years, aligning with interest payment schedules.

The previous communication regarding this tranche was made on December 26, 2025, confirming the redemption timeline. These structured updates help investors plan their exit strategies effectively.

Investor Implications

The fixed redemption price of ₹13,929 per unit offers clarity for investors opting for premature redemption. This valuation reflects the recent movement in gold prices and provides a benchmark for returns on the bond.

Investors who hold the bonds until maturity will continue to benefit from the interest component and any further appreciation in gold prices. The announcement reinforces the Government’s commitment to transparency and investor protection under the Sovereign Gold Bond Scheme.

Read More: Top Gold ETFs for 2026 Based on 1 Year Returns.

Conclusion

The Government of India has confirmed ₹13,929 per unit as the redemption price for premature redemption of SGB 2020-21 Series-IV on January 14, 2026. The calculation is based on IBJA gold rates for the three preceding business days.

This development provides investors with a clear exit option while maintaining compliance with regulatory norms. The Sovereign Gold Bond Scheme continues to serve as a structured and transparent investment avenue linked to gold prices.

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.