SG Bond Series I Redeemable on 4 May Offers Investors Potential 386% Return
Reserve Bank of India Announces Final Redemption Price for Sovereign Gold Bond 2018-19 Series I
The Reserve Bank of India (RBI) has announced the final redemption price for the Sovereign Gold Bond (SGB) 2018-19 Series I, which was issued on May 4, 2018, and is set to mature on Monday, May 4, 2026.
The redemption price for the SGB maturing on May 4, 2026, has been set at Rs 14,901 per unit. This value is calculated based on the simple average of gold's closing prices over three business days, April 28, April 29, and April 30, 2026.
The redemption price reflects the average India Bullion and Jewellers Association (IBJA) closing rate for 999 purity gold from the three days leading up to the exit date.
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SGB 2018-19 Series I: A Record-Breaking Investment
The SGB 2018-19 Series I was issued at Rs 3,064 per gram for online investors, after a Rs 50 discount on the nominal price of Rs 3,114. At maturity, it delivers an absolute return of around 386 percent. This means an initial investment of Rs 1 lakh at the time of issuance would have grown to approximately Rs 4,86,320 on redemption.
Interest on SGBs
Sovereign gold bonds offer a fixed interest rate of 2.5 percent an annum, calculated on the initial investment amount. The interest is paid semi-annually and credited directly to the investor's bank account, with the final interest payment made at maturity along with the principal amount.
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Tax Implications
Capital gains arising on redemption of Sovereign Gold Bonds (SGBs) remain tax-exempt for individual investors. However, investors buying these bonds from the secondary market should be cautious under the revised rules. As per changes introduced in Budget 2026, the tax exemption applies only if the bonds were purchased during primary issuance and held until maturity (8 years). Any premature redemption through the RBI will not qualify for this exemption.
| Investment Type | Initial Price | Redemption Price | Return on Investment |
|---|---|---|---|
| Online Investors | Rs 3,064 per gram | Rs 14,901 per unit | 386% |
Note: The return on investment is calculated based on an initial investment of Rs 1 lakh.
Investor Takeaway
Investors who purchased the Sovereign Gold Bond Series I in 2018 may see a potential return of 386% at maturity.
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