The Reserve Bank of India (RBI) has announced the premature redemption of two Sovereign Gold Bond (SGB) tranches—Series IV of 2017-18 and Series II of 2018-19—scheduled for April 23, 2025. These bonds were originally issued on October 23 in their respective years. In accordance with the terms of the SGB scheme, investors are eligible for early redemption after completing five years, provided the request is made on one of the semi-annual interest payout dates. This feature offers a blend of flexibility and returns, making it a favored choice among conservative yet growth-seeking investors.

SGBs are government securities denominated in grams of gold. They offer a fixed annual interest rate of 2.5%, payable semi-annually, along with the opportunity to benefit from the appreciation in gold prices at the time of redemption or maturity. Investors looking to exit before the full eight-year term have two options: they can either sell the bonds in the secondary market, if listed, or opt for early redemption via the RBI’s official process through banks, post offices, or stock exchanges, depending on where the bonds are held. To avoid last-minute hassles, financial advisors suggest checking with your bank or depository well before the redemption date.

For the two series eligible for redemption this April, the RBI has set the redemption price at ₹9,669 per unit. This rate is calculated based on the simple average of the closing prices of 999 purity gold, as published by the India Bullion and Jewellers Association (IBJA) over the last three business days—April 17, 21, and 22, 2025. This method ensures that the redemption price reflects prevailing market conditions, providing a fair exit value to investors.

Earlier this month, two other SGB series were also redeemed prematurely. The 2017-18 Series III, originally issued at ₹2,964 per unit on October 16, 2017, was redeemed on April 16, 2025, at ₹9,221 per unit. Likewise, the 2019-20 Series V, issued on October 15, 2019, at ₹3,788 per unit, was redeemed on April 15, 2025, at ₹9,069 per unit. These redemption prices were also determined using the average of IBJA’s published gold prices over three consecutive business days. Both series yielded significant capital gains, showcasing the enduring appeal of gold amidst global uncertainty and economic headwinds.

This redemption opportunity arrives at a critical time, especially as the Union Budget 2025 has officially discontinued the issuance of new SGBs. While fresh purchases are no longer possible, existing SGBs remain in force until maturity or eligible redemption. Despite policy changes, the scheme continues to attract investors for its low-risk profile, interest income, and gold-linked appreciation.

Compared to high-volatility products like equity index funds—such as Axis Nifty funds, which have delivered impressive returns but with greater risk—SGBs stand out for their stability, security, and inflation-hedging capacity. As economic conditions remain fluid, Sovereign Gold Bonds offer a reliable and dignified exit route for cautious investors, blending government backing with market-linked returns.