Sovereign Gold Bond 2020–21 Series IX Redeems at ₹13,381, Delivers 168% Return Over 5 Years

The premature redemption window for Sovereign Gold Bond (SGB) 2020-21 Series IX opens on January 5, 2026, marking 5 years since issuance.  

Investors in this tranche can avail redemption at a price of ₹13,381 per unit, reflecting a 168% gain from the original issue price. This is in addition to annual interest earnings, making it a significant milestone for bondholders. 

168% Gain in 5 Years on Gold Bond Tranche Issued in 2021 

The Sovereign Gold Bond 2020-21 Series IX was issued on January 5, 2021, at an issue price of ₹5,000 per gram. According to the Reserve Bank of India, the redemption price on January 5, 2026, has been set at ₹13,381 per unit.  

This translates to a ₹8,381 increase per unit, or a 167.6% gain over 5 years. The return is calculated based on the simple average of gold prices of 999 purity over the 3 business days preceding redemption, as published by the India Bullion and Jewellers Association. 

Interest at the rate of 2.5% per annum is paid semi-annually to SGB holders during the investment period. The interest earnings are additional to the capital appreciation gained from rising gold prices. 

Eligibility and Redemption Timing 

SGBs come with a maturity period of 8 years; however, early redemption is allowed after 5 years if it aligns with an interest payout date. Since the bonds were issued on January 5, 2021, investors become eligible for premature exit on January 5, 2026. Redemption is processed based on gold prices observed on December 31, 2025, January 1, 2026, and January 2, 2026. 

Read More: Sovereign Gold Bond 2017–18 Series XIV Redeems at ₹13,486, Delivers 376% Return Over 8 Years! 

Issue and Taxation Details 

The original issue price declared on December 24, 2020, was ₹5,000 per gram. Investors who applied and paid online were offered a ₹50 discount per gram, raising effective gains further. As per current tax provisions, individual investors enjoy exemption from capital gains tax on redemption proceeds for SGBs, enhancing the net return on the instrument. 

Conclusion 

Investors in the SGB 2020-21 Series IX have now become eligible for premature redemption with a 168% gain in price over 5 years. Along with the annual 2.5% interest payment and tax benefits on redemption, this tranche delivers substantial value since issuance. 

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 the securities market are subject to market risks. Read all the related documents carefully before investing.