Sovereign Gold Bond Investors Get Early Exit Option with Near 200% Return

Investors in the Sovereign Gold Bond (SGB) 2020-21 Series-XI have been given an early exit option after completing five years, allowing them to redeem their bonds from August 7, 2026. This is a unique opportunity for those who invested Rs 1 lakh in the bond, which has now grown to nearly Rs 3 lakh - a return of around 200%, according to the redemption calculation.

The premature redemption value is determined by using the average closing price of gold of 999 purity published by the India Bullion and Jewellers Association for the three preceding business days. This allows investors to gain exposure to gold prices without physically holding the metal, as SGBs are government securities issued by the Reserve Bank on behalf of the Government of India.

The bonds also carry a fixed interest rate of 2.5% per annum, with interest paid twice a year. Eligible investors can hold up to 4 kg of SGBs in a financial year, while trusts and eligible entities can invest up to 20 kg.