The Reserve Bank of India (RBI) has announced that investors in the Sovereign Gold Bond (SGB) 2020-21 Series VII will receive a premature redemption price of ₹14,614 per gram on October 19, 2026. This date was chosen because October 20 is a holiday for Dussehra.
Sovereign Gold Bonds are government securities that allow investors to benefit from gold price movements without physically holding the metal. They also offer a fixed interest rate of 2.5% per annum on the initial investment amount.
The redemption price is calculated using the simple average of the closing prices of 999-purity gold over the three preceding business days, as published by the India Bullion and Jewellers Association Ltd (IBJA). For the SGB 2020-21 Series VII, the redemption price is based on the average of October 14, October 15, and October 16, 2026.
Investors who subscribed offline will see a capital gain of ₹9,563 per gram, translating to a return of 189.33%. Those who subscribed online with a ₹50-per-gram discount will gain ₹9,613 per gram, resulting in a 192.22% return. For a 10-gram investment, offline subscribers will receive ₹1,46,140 at redemption, while online subscribers will get the same amount but with higher gains due to the discount.
In addition to capital gains, investors earn a fixed interest of 2.5% per annum. For a 10-gram investment, offline subscribers will earn ₹7,576.50 in interest over six years, while online subscribers will earn ₹7,501.50. Combining capital gains and interest, the total return for offline subscribers is ₹1,03,206.50, and for online subscribers, it is ₹1,03,631.50.