Sovereign Gold Bonds deliver biggest return in 5 years: Rs 6,000 per unit – Full details of this series
If you invested in the Sovereign Gold Bond (SGB) in February 2020, then now your gold is really proving to be a real wealth multiplier. The Reserve Bank of India (RBI) fixed the premature redemption price for 2019-20 Series IX at Rs 10,070 per gram, giving investors a total profit of Rs 6,000 per unit or 147% in 5 years and an annual compounded return (CAGR) of about 20%. The issue price of SGBs in this particular series was fixed at Rs 4,070 per gram in September 2019. And remember, this figure is only the profit from the increase in the price of gold – the 2.5% fixed interest per year has not been added yet.
Along with this, the 2020-21 Series V issued in August 2020 is also available for premature redemption, which has given around 89% total return and around 13.5% CAGR. This translates into a gain of Rs 4,736 per unit. The issue price was fixed at Rs 5,334 per gram in August 2020.
Both tranches of SGBs were due for premature redemption on August 11, according to a Reserve Bank of India (RBI) circular.
SGB Scheme – Digital way to invest in gold
The SGB scheme was launched in November 2015 under the Gold Monetisation Scheme. Its purpose was to encourage people to invest in gold in digital form instead of physical gold, thereby reducing the country’s gold imports and investors can invest money in a safe, interest-earning option. It was managed by the RBI on behalf of the government.
Any Indian citizen, HUF, trust or institution could invest in it. The minimum investment was 1 gram and the maximum limit was 4 kg per financial year for individuals and 20 kg for institutions.
Tenure and return rules
The total tenure of SGB was 8 years, but after 5 years investors could opt for premature redemption. On maturity, the investor was paid the current price of gold. In addition, investors received a fixed interest of 2.5% per annum as half-yearly payments.
How many series were redeemed?
In the last five years, several SGB series have matured or become available for premature redemption.
In April–September 2024, 26 series were offered for premature redemption, including tranches for 2016-17, 2017-18 and 2018-19.
In the April–September 2025 RBI list, 33 series were scheduled for premature redemption, including tranches from 2017-18 to 2020-21.
Earlier tranches such as the November 2015 series have now fully matured and investors have received their final payouts.
Why was the SGB scheme closed?
In February 2024, the government stopped new issues of SGB. The initial goals — reducing gold imports and bringing investors from physical gold to digital gold — were largely achieved. Also, considering the administrative costs and changing investment trends in the market, the government decided not to take it forward.
What is the lesson?
The success of 2019-20 Series IX proves that timely investment, patience and government guarantee can give great returns. The tremendous jump in the price of gold and the fixed interest received every year have really filled the pockets of investors with ‘gold’.