RBI Opens SGB Early Redemption-202% Gains; Here's What Investors Must Know
April 20, 2026
RBI opens SGB premature redemption at Rs 15,254/unit, delivering over 200 per cent returns. Here’s how pricing, gains, and tax rules work., Personal Finance, Times Now
Sovereign Gold Bond Scheme 2020-21 (File Photo)
Photo : ET Now Digital
The Reserve Bank of India has enabled early redemption for investors holding Sovereign Gold Bond (SGB) 2020-21 Series-VII on April 20, as per its latest notification from the central bank. This move follows the scheme’s guidelines, which allow investors to exit after completing five years from the issue date, specifically on interest payout dates. The rule offers flexibility to bondholders who may want to encash their investment before the full tenure ends.
Typically, SGBs mature after eight years, but this mid-term exit window provides an opportunity for those looking to book profits earlier.
The redemption value is determined using a standard formula based on market-linked gold prices. It is calculated as the simple average of the closing prices of 999-purity gold over the previous three business days. These rates are published by the India Bullion and Jewellers Association Ltd (IBJA).
“Accordingly, the redemption price for premature redemption due on 20 April, shall be Rs 15,254 (Rupees fifteen thousand two hundred and fifty-four) per unit of SGB based on the simple average of the closing price of gold for the three business days, i.e., 17-17 April 2026,” the RBI stated.
Over 200% Returns For Investors
The early exit presents a substantial gain for investors. The bonds were originally issued at Rs 5,051 per unit, and the current redemption price of Rs 15,254 translates into a return exceeding 202 per cent. Additionally, those who subscribed online had received a Rs 50 discount at issuance, effectively increasing their gains to around 205 per cent. On top of this capital appreciation, investors also earned a fixed annual interest of 2.5 per cent during the holding period, making the investment even more rewarding.
Recent updates in taxation rules have altered how gains from SGBs are treated. For bonds redeemed after April 1, 2026, the capital gains tax exemption is limited to original subscribers who hold until maturity.
For others, long-term capital gains (LTCG) on holdings exceeding 12 months are taxed at 12.5 per cent, while short-term gains are taxed as per the investor’s income slab. Bonds purchased from the secondary market do not qualify for tax exemptions upon redemption. Interest income from these bonds remains taxable under applicable slab rates.
SGB Scheme Status In 2026
Sovereign Gold Bonds, issued by the RBI on behalf of the Government of India, have served as a paper alternative to physical gold investments. They combine capital appreciation potential with sovereign backing and eliminate storage-related concerns.
However, no fresh issuances have been announced for FY 2026–27 so far, and the scheme appears to be on hold amid borrowing concerns. Existing investors can continue holding their bonds until maturity, opt for early redemption when eligible, or trade them on stock exchanges.
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Priya Raghuvanshi author
She is working as a Chief Copy Editor at Times Now’s Business Desk, where she covers key developments in the stock market, Indian corporates across se ... View More
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Business
Personal Finance
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Photo : ET Now Digital
The Reserve Bank of India has enabled early redemption for investors holding Sovereign Gold Bond (SGB) 2020-21 Series-VII on April 20, as per its latest notification from the central bank. This move follows the scheme’s guidelines, which allow investors to exit after completing five years from the issue date, specifically on interest payout dates. The rule offers flexibility to bondholders who may want to encash their investment before the full tenure ends.
Typically, SGBs mature after eight years, but this mid-term exit window provides an opportunity for those looking to book profits earlier.
The redemption value is determined using a standard formula based on market-linked gold prices. It is calculated as the simple average of the closing prices of 999-purity gold over the previous three business days. These rates are published by the India Bullion and Jewellers Association Ltd (IBJA).
“Accordingly, the redemption price for premature redemption due on 20 April, shall be Rs 15,254 (Rupees fifteen thousand two hundred and fifty-four) per unit of SGB based on the simple average of the closing price of gold for the three business days, i.e., 17-17 April 2026,” the RBI stated.
Over 200% Returns For Investors
The early exit presents a substantial gain for investors. The bonds were originally issued at Rs 5,051 per unit, and the current redemption price of Rs 15,254 translates into a return exceeding 202 per cent. Additionally, those who subscribed online had received a Rs 50 discount at issuance, effectively increasing their gains to around 205 per cent. On top of this capital appreciation, investors also earned a fixed annual interest of 2.5 per cent during the holding period, making the investment even more rewarding.
Recent updates in taxation rules have altered how gains from SGBs are treated. For bonds redeemed after April 1, 2026, the capital gains tax exemption is limited to original subscribers who hold until maturity.
For others, long-term capital gains (LTCG) on holdings exceeding 12 months are taxed at 12.5 per cent, while short-term gains are taxed as per the investor’s income slab. Bonds purchased from the secondary market do not qualify for tax exemptions upon redemption. Interest income from these bonds remains taxable under applicable slab rates.
SGB Scheme Status In 2026
Sovereign Gold Bonds, issued by the RBI on behalf of the Government of India, have served as a paper alternative to physical gold investments. They combine capital appreciation potential with sovereign backing and eliminate storage-related concerns.
However, no fresh issuances have been announced for FY 2026–27 so far, and the scheme appears to be on hold amid borrowing concerns. Existing investors can continue holding their bonds until maturity, opt for early redemption when eligible, or trade them on stock exchanges.
Latest News
Priya Raghuvanshi author
She is working as a Chief Copy Editor at Times Now’s Business Desk, where she covers key developments in the stock market, Indian corporates across se ... View More
News
Business
Personal Finance
End of Article