SGB 2019-20 Series III redemption today: ₹1 lakh investment turns ₹4.44 lakh as RBI fixes price at ₹15,310
Investors holding Sovereign Gold Bond (SGB) 2019-20 Series III can opt for premature redemption from today, August 14, 2026. The Reserve Bank of India (RBI) has fixed the redemption price at ₹15,310 per unit, sharply higher than the issue price of ₹3,449 per gram for investors who applied online.
The price translates into an absolute gain of ₹11,861 per unit, or about 343.9%, on the initial investment, excluding the interest earned during the holding period. The SGB was issued on August 14, 2019, making this a seven-year holding period.
The redemption price is based on the simple average of the closing prices of 999-purity gold for the three business days preceding the redemption date, as published by the India Bullion and Jewellers Association (IBJA). The RBI’s SGB rules provide for premature redemption after the fifth year from the date of issue, on an interest payment date.
₹1 lakh investment would be worth about ₹4.44 lakh
The 2019-20 Series III was issued at ₹3,499 per gram, with a ₹50-per-gram discount for investors who applied online and made the payment through digital mode. This brought the effective issue price for such investors to ₹3,449 per gram.
At the ₹15,310 redemption price, the investment has multiplied more than fourfold on the gold-price component alone.
For instance, ₹1 lakh invested at the online issue price would correspond to around 28.99 units of the SGB. At ₹15,310 per unit, those units would be worth approximately ₹4.44 lakh at premature redemption.
This represents an absolute gain of about ₹3.44 lakh, before accounting for interest. The annualised return from the increase in the redemption value works out to roughly 23.7% a year over seven years.
SGB investors also received 2.5% annual interest on the original investment, paid semi-annually. That interest is separate from the capital appreciation linked to gold prices. RBI’s SGB framework specifies the 2.5% fixed annual interest rate and eight-year maturity, with premature redemption available from the fifth year on interest payment dates.
Investors who bought the bonds at the offline issue price of ₹3,499 would also have made a substantial gain, although their return from price appreciation would be marginally lower than that of online subscribers.
Should SGB investors redeem today?
The headline return needs to be viewed alongside the revised tax treatment of SGBs.
From April 1, 2026, the capital gains exemption on SGB redemption has been narrowed. The Finance Bill, 2026 specifies that the exemption applies when an individual holds the SGB continuously from the date of original issue until maturity. The government’s Budget 2026 FAQs further clarify that the exemption does not apply to premature redemption, even after the prescribed five-year lock-in period.
This is important for the 2019-20 Series III investors choosing to exit today. Even an original subscriber who has held the bond for seven years cannot claim the capital gains exemption on a premature redemption. The tax benefit is linked to holding the SGB until its scheduled maturity.
The amended rules also clarify that SGBs acquired through the secondary market do not qualify for the exemption because the exemption is restricted to individuals who subscribed at the original issue and continuously held the bonds until maturity.
For SGB 2019-20 Series III holders, however, the numbers are significant. The gold-linked value has risen nearly 4.4 times in seven years, while investors have additionally received the SGB’s 2.5% annual interest during the holding period.
