Investors in the Sovereign Gold Bond (SGB) 2020-21 Series VIII are getting excellent returns.
The RBI has fixed the premature redemption price for this tranche at ₹12,476 per unit, and the redemption window opens on November 18, 2025.
At this price, investors are earning a return of around 141%.
What Was the Issue Price of This SGB?
This bond was issued on 18 November 2020 at ₹5,177 per gram. Those who applied online received a discount of ₹50 per gram.
According to SGB rules, early redemption is allowed only after five years and only on interest payment dates.
Updated on: November 18, 2025, at 5:31 PM
How Does RBI Decide the Redemption Price?
RBI calculates the redemption value using the simple average of the closing prices of 999-purity gold as published by the India Bullion and Jewellers Association (IBJA) on November 13, 14, and 17, 2025.
If an investor does not apply for early redemption, they must either wait for the next redemption window or sell the bond on the stock exchange, where price and liquidity vary daily.
Benefits of Investing in SGBs
Investors earn returns based on gold price appreciation plus 2.5% annual interest.
If held till maturity, capital gains tax is completely waived.
The SGB scheme started in 2015.
Till March 31, 2025, the government raised 146.96 tonnes of gold, worth ₹72,275 crore, through 67 tranches.
By June 15, 2025, investors redeemed bonds equal to 18.81 tonnes of gold.
Premature Redemption or Hold Till Maturity?
If investors need money and are already seeing excellent returns, early redemption can be a smart choice.
Many SGB series are currently offering more than 100% returns, which is rare for such a safe investment.
RBI also uses a transparent formula, making the redemption process simple.
However, for long-term wealth building, holding the SGB till maturity is more beneficial.
Gold generally appreciates over time, and investors continue receiving 2.5% annual interest.
Most importantly, maturity proceeds are tax-free, making SGBs a strong long-term option.
