Sovereign Gold Bonds: Early redemption price offers investors massive gains

Investors in the Sovereign Gold Bond (SGB) 2017-18 Series IX are all set to enjoy a jaw-dropping return. The Reserve Bank of India has announced the premature redemption price at ₹9,560 per gram for May 27, 2025. This translates into a return of over 220% from the original issue price of ₹2,964 per gram.

Even Bigger Gains for Digital Buyers

If you were among those who subscribed online and paid digitally, the good news gets even better. You bought the bond at a discounted price of ₹2,914 per gram, and now, your absolute return stands at nearly 228%. In an era of volatile markets, this steady gold-backed return has turned into a golden surprise.

How Is the Price Calculated?

The RBI uses a transparent formula to calculate the redemption price—it’s based on the simple average of the closing gold prices (999 purity) published by the India Bullion and Jewellers Association (IBJA) for May 22, 23, and 26, 2025. This ensures investors benefit directly from prevailing market trends.

Timing Is Everything

Though SGBs have a seven-year maturity period, premature redemption is allowed after the fifth year on interest payout dates. Since this bond was issued on November 27, 2017, the May 27, 2025 payout date is the first chance for an early exit.

Read more: How India came to own one-sixth of the world’s gold | OPEN Magazine Special

No More Fresh SGBs, But Existing Ones Still Shine

In Union Budget 2025, the government discontinued fresh SGB issuances. However, if you’re already invested, your holdings remain valid and can be redeemed as per the schedule or on eligible early exit dates. Plus, don't forget the 2.5% annual interest, adding to the already impressive returns.