The Reserve Bank of India (RBI) has allowed early redemption of the Sovereign Gold Bond (SGB) 2020-21 Series VI.
RBI Allows Early Exit
On September 6, 2025, RBI opened the window for premature redemption of Sovereign Gold Bond 2020-21 Series VI.
How Much Profit Did Investors Make?
The redemption price has been set at ₹10,610 per bond, which is 107% higher than the issue price of ₹5,117. Investors have more than doubled their investment in five years.
When Were These Bonds Issued?
These bonds were originally issued on September 8, 2020. Now, exactly five years later, investors have the option to redeem them early.
How Is the Redemption Price Calculated?
The redemption price is based on the average closing price of gold (as per IBJA) for the last three trading days—September 3, 4, and 5, 2025.
What Is the Tenure of These Bonds?
SGBs have a total maturity period of 8 years. However, investors can choose to exit after 5 years.
Do Investors Earn Interest?
Yes, SGB investors receive an annual interest of 2.5%, which is credited directly to their bank accounts every six months.
What About Taxation?
The interest earned is taxable. But the capital gains from redemption are tax-free. If the bonds are transferred after a long period, indexation benefits are also available.
Why Were SGBs Introduced?
The Government of India launched SGBs in November 2015 to encourage people to invest in gold bonds instead of buying physical gold.
What Are the Benefits?
Reduces gold imports
Lowers the practice of keeping physical gold at home
Promotes investment of household savings
