The Reserve Bank of India (RBI) has declared the premature redemption price for Sovereign Gold Bonds (SGB) 2020-21 Series VI, which were issued on September 8, 2020. Investors can opt for premature redemption on September 6, 2025 (since September 7 and 8 are holidays), the RBI said in its latest statement.

Sovereign Gold Bond Scheme – Key Highlights

The Sovereign Gold Bond (SGB) scheme, managed by the RBI on behalf of the Government of India, is a safe alternative to holding physical gold. It eliminates storage and purity concerns while also paying 2.5 percent annual interest. Key features include:

Tenure: 8 years, with premature redemption allowed only after the 5th year, on interest payout dates.

Bonds are tradable, transferable, and can be used as collateral for loans.

How the Redemption Price Is Calculated

As per RBI’s release dated September 5, 2025, the redemption price is based on the simple average of the closing gold price (999 purity) of the previous three business days, published by the India Bullion and Jewellers Association Ltd (IBJA).

Premature Redemption Price of SGB 2020-21 Series VI

Issue Date: September 8, 2020

Issue Price: Rs 5,117 per gram

Premature Redemption Date: September 6, 2025

Redemption Price: Rs 10,610 per unit

This means investors will earn an absolute return of 107.35 percent (excluding interest). The gain per unit works out to ₹5,493 (₹10,610 – ₹5,117).

Interest Payment on SGBs

In addition to capital appreciation, SGBs pay a fixed interest rate of 2.5 percent per annum, credited semi-annually to the investor’s bank account. The final interest installment is paid along with the principal at maturity.

What Investors Should Do for Premature Redemption

Investors planning for early exit should:

Identify the tranche of bonds they hold by checking the issue date.

Submit a redemption request within the deadline provided in the redemption schedule.