SGB Premature Redemption Today: How Investors Earned 374% Returns On Gold Bonds
Last Updated:
RBI sets premature redemption price for Sovereign Gold Bond 2018-19 Series-III at Rs 15102 per unit on May 13 2026, implying about 374 percent return excluding interest
From Rs 3,183 To Rs 15,102: SGB Investors See Multi-Bagger Returns
SGB Scheme: The Reserve Bank of India (RBI) has announced the premature redemption price for the Sovereign Gold Bond 2018-19 (Series-III). The premature redemption of Gold Bond is permitted after the fifth year from the date of issue of such Gold Bond.
The SGB 2018-19 Series-III tranche can be redeemed today, May 13, 2026.
What Is The Redemption Price?
The redemption price of SGB is based on simple average of closing price of gold of 999 purity of previous three business days from the date of redemption, as published by the India Bullion and Jewellers Association Ltd (IBJA).
Accordingly, the redemption price for premature redemption due on May 13, 2026, is Rs 15,102/- (Rupees Fifteen Thousand One Hundred and Two Only) per unit of SGB based on the simple average of the closing price of gold for the three business days, i.e., May 08, May 11, and May 12, 2026.
The bond scheme gave a return of 374 per cent, excluding the 2.5 per cent annual interest paid to investors.
Rs 3,183 per unit and the redemption price is Rs 15,102 per unit, then:
Absolute return = Rs 15,102 – Rs 3,183 = Rs 11,919 per unit
Percentage return = (11,919 ÷ 3,183) × 100 ≈ 374.4%
Tax Treatment of Sovereign Gold Bonds
Redemption On Maturity: Before the Budget 2026, capital gains on SGB maturity were fully tax-free for all investors, including those who bought from the secondary market. After the Budget 2026, this benefit is available only to investors who bought SGBs in the original issue and hold them till maturity. Secondary market buyers will now have to pay capital gains tax.
Earlier Redemption: If SGBs are sold before maturity, capital gains tax applies. Gains after more than 12 months are taxed as LTCG at 12.5%, while gains within 12 months are taxed as per the investor’s income tax slab.
However, the interest on the SGBs is taxable.
Interest Rate On SGBs
Interest on the gold bonds, at an annual fixed rate of 2.5%, is credited semi-annually to the bank account of the investors.
What Is The Sovereign Gold Bonds Scheme?
The Sovereign Gold Bond (SGB) Scheme was launched by the Government of India in November 2015 as an alternative to owning physical gold. Issued by the Reserve Bank of India (RBI) on behalf of the Centre, these bonds were denominated in grams of gold and offered investors the dual benefit of earning a fixed annual interest (2.5% on the issue price) along with capital appreciation linked to gold prices. The scheme aimed to reduce India’s dependence on imported physical gold, curb hoarding, and channel household savings into financial assets.
Read More
