2 weeks ago
The Sovereign Gold Bond (SGB) 2017-18 Series III was due for premature redemption on April 16, 2025. The Reserve Bank of India (RBI) fixed the redemption price at ₹9,221 per unit. This would have given investors an absolute return of 211.1% on their initial investment of ₹2,964 per gram in 2017, excluding interest.
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But what happens if you missed redeeming it on Wednesday (April 16)?
You don’t lose your investment.
SGBs have a tenure of 8 years. But the government allows investors to exit early, starting from the 5th year, only on interest payment dates.
For this series, issued on October 16, 2017, the first date for premature redemption started from October 16, 2022. The latest window was April 16, 2025.
If you didn’t opt out, your bond will continue to earn 2.5% annual interest, payable twice a year. You can still wait until the final maturity in October 2025, or sell the bond in the secondary market.
How is the redemption price calculated?
The RBI calculates the redemption price based on the average closing price of gold (999 purity) for the last three business days before the redemption date. This data is published by the India Bullion and Jewellers Association (IBJA).
For April 16, 2025, the RBI considered prices from April 9, April 11, and April 15 (April 10 was a holiday).
Based on this, the final premature redemption price was set at ₹9,221 per unit.
This price applies only to bondholders who opted to redeem on April 16 via their bank or demat provider.
What can investors do now?
If you missed the April 16 redemption:
Hold the bond till maturity in October 2025. You will receive the final redemption price then, based on gold prices at that time.
Sell on the stock exchange, where SGBs are traded. However, prices may differ from RBI’s redemption rate, and liquidity may be low.
Track upcoming interest dates in other SGB tranches you own.
Experts advise checking with your bank or depository participant well in advance of such dates.
It must be noted that the government in Union Budget 2025 discontinued fresh issuances of the Sovereign Gold Bond scheme.
However, existing bonds remain active and will be redeemed on schedule or on eligible early redemption dates.
