Sovereign Gold Bonds (SGBs) have a total maturity period of 8 years, but investors are allowed to withdraw after 5 years, which is the lock-in period.
Even though SGBs are listed on stock exchanges, trading volume is low, making it difficult to sell them easily.
Now, investors in 34 different installments of SGB can withdraw their money.
So, the big question is—should you exit now or wait till maturity? According to the Reserve Bank of India (RBI), these 34 SGB installments will mature between April and September 2025.
Many of these can be redeemed early. RBI releases a list twice a year, showing which installments are eligible for early withdrawal.
SGB Matures in 8 Years
SGBs have a maturity period of 8 years, with a 5-year lock-in. After 5 years, investors can redeem their bonds—also at the 6th and 7th year—through RBI.
For example, the installment issued on October 15, 2019, can be redeemed on April 15, 2025.
The issue price was ₹3,785 per gram, and the redemption price is ₹9,069 per gram—a significant gain for investors.
No Capital Gains Tax on RBI Redemption
One of the biggest advantages of redeeming SGBs through RBI’s window is the complete exemption from capital gains tax.
Investors also receive annual interest during the investment period. However, if you sell your SGBs on the stock market, you’ll have to pay capital gains tax on any profit earned.
2.5% Annual Interest Over and Above Gold Price Gains
Sourav Ghosh, co-founder of the online bond platform Giraffe, explains that SGB investors receive 2.5% interest annually, along with the benefit of rising gold prices.
In uncertain global conditions, gold is a safe asset, and SGB offers an attractive risk-reward ratio.
Because gold prices have been rising continuously, the government has paused new issues of the SGB scheme. The last installment was released in February 2024.
What Should You Do?
Experts recommend that if you don’t need funds urgently, it’s better to hold SGBs until full maturity to gain maximum benefits.
However, if you do need money, then redeeming early using RBI’s window is the smarter choice, as you’ll still enjoy tax-free returns.
With the way gold prices are increasing, both early redemption and holding till maturity are likely to provide strong returns.
