141% Gain on Sovereign Gold Bond 2020-21 Series-VIII Premature Redemption at ₹12,476 Per Gram

The Reserve Bank of India has released the redemption price for premature redemption of Sovereign Gold Bond 2020-21 Series VIII, which becomes eligible for early exit on November 18, 2025, after completing 5 years from its issue date of November 18, 2020. 

Premature Redemption Window for SGB 2020-21 Series VIII 

Under the Sovereign Gold Bond Scheme, premature redemption is permitted after 5 years from the issue date and only on interest payment dates. As per the original notification under F.No.4(4)-B(W&M)/2020 dated October 09, 2020, the next eligible redemption date for this tranche falls on November 18, 2025. Investors opting for early redemption may receive the amount directly into their registered bank accounts. 

Calculation of the Redemption Price 

The redemption price for all SGB redemptions is linked to the simple average of the closing price of gold of 999 purity for the previous 3 business days, as published by the India Bullion and Jewellers Association. For this tranche, the business days considered were November 13, 2025, November 14, 2025, and November 17, 2025. Based on this calculation, the redemption price has been fixed at ₹12,476 per unit. 

Read More: Sovereign Gold Bond 2018-19 Series-III Premature Redemption at ₹12,350 Per Gram! 

Returns for Investors 

Investors who purchased the SGB 2020-21 Series-VIII when it was issued on November 18, 2020, are set to receive approximately 153% absolute returns over the 5-year holding period. 

The capital gain per gram is ₹12,476 (redemption price) minus ₹5,177 (issue price), which equals ₹7,299 per gram. This represents a capital appreciation of 140.99% 

This substantial return reflects both the capital appreciation linked to gold prices and the fixed annual interest of 2.5% paid on the issue price. The bonds offer dual benefits, combining gold price appreciation with steady interest income throughout the investment tenure. 

Gold Price Basis and Applicable Details 

The RBI clarified that the redemption price strictly follows the notified pricing formula to ensure transparency. Since SGB units represent 1 gram of gold each, the redemption value aligns directly with prevailing benchmark gold prices. The premature redemption facility provides an exit option before the full 8-year maturity while still offering market-linked value. 

Official Announcement from RBI 

The communication issued by the RBI Department of Communication confirms the redemption value along with the relevant dates and methodology. The press release, signed by the Deputy General Manager (Communications), forms part of the RBI’s regular updates on SGB maturities and redemption cycles. 

Conclusion 

The premature redemption price of ₹12,476 for SGB 2020-21 Series VIII offers eligible investors clarity ahead of the November 18, 2025, redemption date. The price reflects the transparent gold price averaging mechanism and maintains consistency with the established Sovereign Gold Bond Scheme framework. 

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.