Sovereign Gold Bond Returns have delivered a major gain for investors in the 2020-21 Series XII, with a ₹1 lakh investment now worth around ₹3.33 lakh based on the latest premature redemption price announced by the Reserve Bank of India.
The RBI has fixed the premature redemption price for this SGB series at ₹15,355 per unit.
The bond was originally issued online at ₹4,612 per gram, meaning investors have seen an absolute return of about 233%, excluding interest earned during the holding period.
Sovereign Gold Bond Returns Cross 233 Percent
The calculation is based on the difference between the original issue price of ₹4,612 and the redemption price of ₹15,355 per gram.
This results in an absolute gain of ₹10,743 per unit, or approximately 232.9%.
For an investor who put ₹1 lakh into this SGB at the time of issue, the investment value works out to nearly ₹3.33 lakh at the announced redemption price.
This calculation does not include the interest paid separately on the investment.
Investors who purchased the bonds offline had an issue price of ₹4,662 per gram, as online investors making digital payments received a ₹50 per gram discount.
How Much Did the ₹1 Lakh Investment Gain
The latest value represents the rise in the gold-linked value of the bond.
The ₹1 lakh investment has effectively gained around ₹2.33 lakh in value, taking the principal-linked value to approximately ₹3.33 lakh.
The return figure is an absolute return and should not be confused with an annual return.
It also excludes the periodic interest that SGB investors received during the holding period.
SGBs carry a fixed interest rate of 2.5% per year on the initial investment amount, with interest generally paid twice a year.
This means eligible investors in this series received interest in addition to the increase linked to gold prices.
Why SGB Investors Got a Big Boost
Sovereign Gold Bonds are government securities denominated in grams of gold and are issued by the RBI on behalf of the Government of India.
Their value is linked to the prevailing price of gold rather than physical possession of the metal.
For the September 9, 2026 premature redemption, the redemption price of ₹15,355 per gram was determined using the applicable gold-price calculation based on recent closing prices of 999-purity gold published by the India Bullion and Jewellers Association.
The strong gain in this series reflects the substantial rise in gold prices since its issue in March 2021.
However, returns from SGBs depend on the issue price, redemption price and holding period, so the performance of one series should not be treated as a guaranteed return for future investments.
