The Reserve Bank of India has set the premature gold bond redemption price for Sovereign Gold Bond 2019-20 Series VI at ₹14,213 per unit on October 30, 2026. Investors in the series, issued on October 30, 2019, can choose whether to redeem early.

Key Takeaways

  • The redemption price is based on 999-purity gold prices from October 27 to 29, 2026.
  • The price represents a 275.51% gain over the online issue price, excluding interest.

How the gold bond redemption price was set

The ₹14,213 price is the simple average of closing prices for 999-purity gold published by the India Bullion and Jewellers Association for the three preceding business days: October 27, 28 and 29.

Premature redemption is permitted after the fifth year from a bond’s issue date, on a date when interest is payable. The October 30 redemption is an option for holders, not confirmation that all investors have redeemed.

Sovereign gold bonds are government securities denominated in grams of gold and issued by the RBI on behalf of the government. The RBI’s government securities primer explains that some bonds have options allowing investors to sell them to the issuer before maturity.

What the price means for investors

The series was issued at ₹3,785 per gram for eligible online purchases and ₹3,835 per gram for offline purchases. The online price reflected a ₹50-per-gram discount for applications paid for digitally.

Compared with the online issue price, the redemption price is ₹10,428 higher per unit, a simple gain of 275.51%. On a proportional basis, ₹1 lakh invested at that price would be worth approximately ₹3.76 lakh at redemption, excluding interest. The calculation is illustrative and does not account for whole-unit holdings.

Sovereign gold bonds generally bear fixed interest of 2.50% a year on the initial investment. That interest is separate from the price gain shown above.

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