SGB premature redemption dates from April-Sept 2026: Check details

The Reserve Bank of India has come out with a calendar for people who want to get their money from Sovereign Gold Bonds before they mature. This calendar is for the period from April 1 2026 to September 30 2026. It covers 33 series of Sovereign Gold Bonds that were issued between 2018 and 2021.

Sovereign Gold Bonds are like securities that are backed by the Government of India. They are denominated in grams of gold which means that their value is linked to the price of gold. Of buying physical gold people can invest in these bonds and hold gold in electronic or certificate form.

The main features of Sovereign Gold Bonds are:

* They are denominated in grams of gold with an investment of 1 gram.

* They are backed by the Government of India which makes them very safe.

* They earn an interest rate of 2.5% per year paid every 6 months.

* They have a tenure of 8 years. People can exit early after 5 years.

* The redemption value is linked to the price of gold.

Sovereign Gold Bonds offer a combination of gold price appreciation, fixed interest income and a sovereign guarantee. This makes them a attractive investment option for people who want to invest in gold.

Now lets talk about redemption. Premature redemption means selling or encashing your Sovereign Gold Bonds before they mature. This is allowed after 5 years from the issue date and only on specific dates announced by the Reserve Bank of India. These dates coincide with the interest payment dates.

The Reserve Bank of India has announced a calendar for redemption of Sovereign Gold Bonds. This calendar includes 33 series of bonds that’re eligible for early redemption. Some of the series include:

* 2018-19 Series II, which was issued on October 23 2018 and is eligible for premature redemption on April 23 2026.

* 2018-19 Series III, which was issued on November 13 2018 and is eligible for redemption on May 13 2026.

* 2018-19 Series IV, which was issued on January 1 2019 and is eligible for redemption on July 1 2026.

These are a few examples. There are other series of Sovereign Gold Bonds that are eligible for premature redemption during this period.

The premature redemption calendar is important because it gives investors a chance to exit early and realize profits from rising gold prices. However it’s also important to note that premature redemption means giving up the remaining interest income and future gold price appreciation.

The redemption price of Sovereign Gold Bonds is calculated based on the closing price of gold for the last 3 working days before the redemption date. This ensures that investors get a market-linked value for their gold.

For example lets say someone invested in Sovereign Gold Bonds in 2019 at a price of ₹3,200 per gram. If the gold price in 2026 is ₹8,000 per gram the redemption value would be ₹8,000 per gram. If the investor had invested 10 grams the redemption value would be ₹80,000.

In addition to the redemption value investors also earn interest income on their Sovereign Gold Bonds. The interest rate is 2.5% per year paid every 6 months. For example if someone had invested ₹1 lakh in Sovereign Gold Bonds the annual interest would be ₹2,500. Over 5 years the total interest would be ₹12,500.

To apply for redemption investors need to submit a request through their bank post office or stock holding corporation. The application must be submitted during the window, which is usually 1 month before the redemption date.

The payment for redemption is credited to the investors bank account on the redemption date.

It’s also important to note that there are tax implications for redemption of Sovereign Gold Bonds. The tax treatment depends on how the bonds were purchased and held. For example if the bonds were purchased directly from the Reserve Bank of India and held till maturity there is no capital gains tax. However if the bonds were purchased in the market capital gains tax applies.

In conclusion the Reserve Bank of Indias premature redemption calendar for Sovereign Gold Bonds gives investors a chance to exit early and realize profits from rising gold prices. However it’s also important to consider the tax implications and the potential loss of remaining interest income and future gold price appreciation.

Investors should carefully check their bond series, redemption date, application deadline, tax impact and gold price outlook before deciding whether to redeem or continue holding until maturity. It’s also important to note that Sovereign Gold Bonds are an attractive investment option, for people who want to invest in gold. They offer a combination of gold price appreciation, fixed interest income and a sovereign guarantee.