SGB Premature Redemption Today: ₹1 Lakh Becomes ₹2.70 Lakh | Check Details

SGB Premature Redemption Today: ₹1 Lakh Investment Turns Into ₹2.70 Lakh – Check Full Details

Investors who invested in Sovereign Gold Bonds (SGBs) issued in 2020–21 have a reason to celebrate today. The premature redemption date has arrived, and due to a sharp rise in gold prices, an investment of ₹1 lakh may now be worth nearly ₹2.70 lakh.

This clearly shows why SGBs are considered one of the best long-term gold investment options in India.

What Is SGB Premature Redemption?

Sovereign Gold Bonds are government-backed securities linked to the market price of gold. Although these bonds have a maturity period of 8 years, investors are allowed to opt for premature redemption after completing 5 years, on specific dates announced by the Reserve Bank of India (RBI).

Premature redemption allows investors to exit early and receive money based on the prevailing gold prices.

SGB Premature Redemption Details (Today)

Bond Series: SGB 2020–21 Series IX  

Issue Date: January 5, 2021  

Premature Redemption Date: January 5, 2026  

Redemption Price: ₹13,381 per unit (per gram)  

Issue Price: Around ₹4,950 per gram  

How ₹1 Lakh Became ₹2.70 Lakh

At the time of issue, gold prices were much lower. Over the past five years, gold prices have increased significantly.

Example:

Initial investment: ₹1,00,000  

Gold price at issue: Approx. ₹4,950 per gram  

Gold price at redemption: Approx. ₹13,381 per gram  

This results in an absolute return of nearly 170%, even before adding interest earnings.

Additional Benefit: Fixed Interest

Apart from gold price appreciation, SGB investors earn a fixed interest of 2.5% per year, paid semi-annually. This interest income further boosts overall returns, making SGBs more attractive than physical gold.

Why Sovereign Gold Bonds Are a Smart Investment

Government-backed and safe  

No storage or purity concerns  

Earn interest along with gold price appreciation  

Better tax efficiency than physical gold  

Strong long-term wealth creation potential  

Should You Redeem or Hold?

Redeem now if you need liquidity or want to book profits.  

Hold till maturity if you expect gold prices to rise further and do not need immediate funds.

Remember, premature redemption is allowed only on RBI-specified dates.

Taxation on SGB Redemption

Interest earned on SGBs is taxable as per your income tax slab. Capital gains on redemption through RBI are generally tax-free if the bond is held till maturity.

Always consult a tax advisor for personalized tax guidance.

Conclusion

The SGB premature redemption today highlights the power of long-term gold investment. Turning a ₹1 lakh investment into nearly ₹2.70 lakh in just five years proves why Sovereign Gold Bonds remain a preferred choice for smart investors.

If you hold eligible SGBs, now is the right time to review your investment strategy.

FAQs

Can SGBs be redeemed anytime?

No, premature redemption is allowed only after 5 years and only on RBI-announced dates.

Are SGBs better than physical gold?

Yes, because they offer interest income, higher safety, and no storage costs.