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The Reserve Bank of India (RBI) has announced the premature redemption price for Sovereign Gold Bond (SGB) 2020-21 Series-I Issue date October 28, 2020. According to a statement from the Central Bank, investors will have the option to redeem this SGB tranche prematurely from October 28, 2025 (Tuesday). The premature redemption of the SGB series will be permitted after the fifth year from the date of issue of such gold bonds on the date on which interest is payable, as per the RBI statementIncome Tax GuideIncome Tax Slabs FY 2025-26Income Tax Calculator 2025New Income Tax Bill 2025How is SGB redemption price calculated?The redemption value will be calculated based on the simple average closing price of the gold of 999 purity published by the India Bullion and Jewellers Association (IBJA) for the preceding three working days, as per the rule.Also read: Sovereign Gold Bond 2025: RBI announces SGB premature redemption dates from October 2025 – March 2026; check details What is the premature redemption date for 2020-21 Series-I?The RBI has said in a statement that in terms of GOI notification F.No. 4(4)-B (W&M)/2020 dated April 13, 2020 (SGB 2020-21 Series-I-Issue date April 28, 2020) on the Sovereign Gold Bond Scheme, the premature redemption of the Gold Bond series may be permitted after the fifth year from the date of issue of such Gold Bonds on the date on which interest is payable. Accordingly, the next due date for the premature redemption of the above tranche shall be on October 28, 2025.What is the redemption price for SGB 2020-21 Series-I?The redemption price for premature redemption due on October 28, 2025, will be Rs 12,198 per unit of SGB based on the simple average of the closing price of gold for the three business days, i.e., October 23, 2025, October 24, 2025, and October 27, 2025. The 2020-21 Series-I was issued at Rs 4,589 per gram for online bonds. It will yield an absolute simple return of nearly 166% on the date of the premature redemption. The absolute return comes to Rs 12,198 -Rs 4,589 = Rs 7,609 (without factoring in the interest). In percentage terms, it is 7609 ÷ 4,589 ×100 = 165.8%. For investors who bought SGBs of the same series offline, the issue price was Rs 4,639 per gram of gold. SGB interest paymentSGBs offer an interest rate of 2.50% (fixed rate) per annum on the initial investment amount. The interest amount is credited semi-annually to the bank account of the SGB investor. The last interest instalment is payable on maturity along with the principal. What investors need to do for premature redemption of SGBs?Investors holding SGBs should review the redemption schedule carefully. Some of the key actions include: a) Identify the tranche to which your bonds belong by checking the issue date. b) Ensure that your request for premature redemption is submitted by the deadline mentioned in the schedule.SGB detailsSGBs offer the dual benefit of gold price appreciation and a fixed annual interest rate, paid semi-annually. While investors can hold them till maturity to enjoy long-term tax-free gains, some can also prefer to redeem early to meet liquidity needs. Each SGB scheme has a maturity period of eight years, but premature redemption is permitted only after the fifth year, on the date announced by the RBI.
