Investors in Sovereign Gold Bonds are set to track five more early redemption dates in August, as the Reserve Bank of India listed upcoming tranches following the completion of previous ones, impacting returns linked to gold market prices.
Investors in Sovereign Gold Bonds have five more premature redemption dates to track in August, beginning on August 11, after the Reserve Bank of India listed six tranches for early exit this month. One series, 2020-21 Series XI, has already completed its redemption cycle on August 7, according to Zee Business and the RBI’s schedule.
The remaining tranches are due on August 11, August 12, August 14 and August 17. They include 2019-20 Series IX and 2020-21 Series V on August 11, 2018-19 Series VI on August 12, 2019-20 Series III on August 14 and 2021-22 Series V on August 17, the schedule shows.
Under the SGB scheme, bonds have an eight-year tenor but can be redeemed early after five years from the issue date, only on dates notified by the RBI. The early-exit route is available to investors who submitted requests within the specified application windows, which have already closed for the August redemptions, Zee Business reported.
The redemption value is linked to the gold market rather than the original issue price. According to the RBI, the payout is calculated using the simple average of the closing price of 999 purity gold over the previous three working days, based on prices published by the India Bullion and Jewellers Association. That means the final amount can be above or below the original investment, depending on gold prices at the time.
SGB holders also earn 2.5% annual interest on the original investment amount, paid twice a year, until redemption. Once the bond is redeemed, that interest stops. Business Standard reported earlier this year that 33 tranches issued between 2018-19 and 2021-22 are eligible for early exit in the April-to-September 2026 window, with requests permitted through authorised offices, depositories and the RBI Retail Direct platform.
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