SGB 2018-19 Series II final redemption today: Investors to pocket 366% gains; check the RBI fixed price, interest rate
The Reserve Bank of India (RBI) has fixed the final redemption price of Sovereign Gold Bonds (SGB) 2018-19 Series II at ₹14,425 per gram. The bonds mature today, October 23, 2026, completing their eight-year tenure.
Sovereign Gold Bonds are government securities denominated in grams of gold and issued by the RBI on behalf of the Government of India. They offer investors exposure to gold prices without requiring physical gold ownership.
According to the RBI press release issued on Thursday, “Gold bonds shall be repayable on the expiration of eight years from the date of issue of the gold bonds. Accordingly, the final redemption date of the above tranche shall be October 23, 2026.”
The subscription window for this tranche was October 15–19, 2018, and the bonds were issued on October 23, 2018.
How is the final redemption price calculated?
In its press release, the RBI stated, “The redemption price of SGB shall be based on the simple average of the closing price of gold of 999 purity of the previous three business days from the date of redemption, as published by the India Bullion and Jewellers Association Ltd (IBJA).”
Accordingly, the RBI fixed the final redemption price at ₹14,425 per gram, based on the average closing gold prices on October 19, October 21, and October 22, 2026.
How much can investors gain from the SGB 2018-19 Series II final redemption?
According to the Ministry of Finance’s October 12, 2018, release, the issue price of SGB 2018-19 Series II was fixed at ₹3,146 per gram for offline subscriptions. Investors who applied online and paid digitally received a ₹ 50-per-gram discount, reducing the issue price to ₹3,096.
At the final redemption price of ₹14,425 per gram, the capital gains are as follows:
| Particulars | Offline | Online |
| Purchase price per gram | ₹3,146 | ₹3,096 |
| Final redemption price per gram | ₹14,425 | ₹14,425 |
| Capital gain per gram | ₹11,279 | ₹11,329 |
| Capital gain (%) | 358.52% | 365.92% |
*Actual gains can vary
At the final redemption price of ₹14,425 per gram, offline subscribers would earn a capital gain of ₹11,279 per gram, while online subscribers would earn ₹11,329 per gram. This translates into capital gains of around 359% and 366%, respectively, excluding interest income and taxes.
How much interest can investors earn over eight years?
Interest on SGBs starts on the date of issue and is paid at a fixed rate of 2.50% per annum on the nominal value of the bond. Interest is paid half-yearly, with the final interest payment made alongside the principal at maturity.
For a 10-gram investment, an offline subscriber who paid ₹31,460 would earn ₹786.50 annually, calculated at 2.5% of the initial investment. An online subscriber who paid the discounted price of ₹30,960 would receive ₹774 annually. Assuming eight full years of interest payments, the estimated interest income would be ₹6,292 for offline subscribers and ₹6,192 for online subscribers. Actual interest received depends on the payment schedule and holding period.
Disclaimer: This is purely for educational/informational purposes and should not be taken as any sort of investment advice. Always consult a SEBI-registered advisor before making any investment decisions.
