Sovereign Gold Bond (SGB) 2025: Upcoming Issue, Premature Redemption, Interest Rate, Features and Benefits

Sovereign Gold Bonds (SGBs) are an ideal gold investment offered by the Reserve Bank of India (RBI). They have been a preferred gold investment option. Sovereign Gold Bond 2025 offers an 2.5% annual rate of interest with captial gain exemption when held till maturity. This article covers details of upcoming Sovereign Gold Bond issue, its features and redemption price.

What is a Sovereign Gold Bond?

The Government of India introduced the Sovereign Gold Bond (SGB) in November 2015 under the Gold Monetisation Scheme to offer an alternative investment to physical gold. They are government securities whose value is denominated in grams of gold.

Investors can purchase SGBs by paying the issue price in cash and redeem them in cash upon their maturity. SGBs allow you to own gold in a digital form without its inherent risks or bearing making and wastage charges. They are low-risk investments that provide returns.  

Sovereign Gold Bond 2025 Upcoming Issue

The Sovereign Gold Bond upcoming issues are uncertain since the government aims to discontinue this bond. The RBI has not announced the issuance of SGB for FY 2024-25.

Thus, there are no issues of SGBs now. The details of the last issue of SGBs are as follows:

Sovereign Gold Bond 2023-24 Series IV

Sovereign Gold Bond Features and Benefits 

Eligibility of a Sovereign Gold Bond

The follwoing are eligible to subscribe for SGB:

• Indian resident individuals
• Individuals on behalf of a minor
• Trusts
• HUFs
• Charitable institutions
• Universities 

How Does Sovereign Gold Bonds Work?

A person can apply for a Sovereign Gold Bond through their banks, Stock Holding Corporation of India Limited (SHCIL), designated post offices and recognised stock exchanges, such as the Bombay Stock Exchange and National Stock Exchange of India Limited, either directly or through agents.

SGBs can also be bought online through the commercial banks’ websites authorised to sell them. Here's how SGBs works:

• Purchase gold bonds from a bank, SHCIL or designated post offices.
• If you have purchased a SGB online, it will reflect in the Demat account portfolio. In case of offline purchase, you can collect the SGB certificate from the holding from the issuing bank, post offices, SHCIL offices or designated agents.
• You will get a 2.5% interest per annum.
• You can redeem your SGB after 8 years or prematurely redeem them after 5 years.

Sovereign Gold Bond Redemption

When the issued SGB completes 8 years, it comes up for final redemption. The price for final redemption is determined based on the simple average closing price of gold with 999 purity in the previous 3 working days, as reported by the India Bullion and Jewellers Association Ltd (IBJA).

The RBI has fixed the final redemption price of ₹9,924 per unit of SGB for the SGB 2017-18 Series II, which is due for final redemption on 28 July 2025. This price fixed is based on the simple average of closing gold price for the week of 21 July-25 July 2025.

Sovereign Gold Bond Premature Redemption Price

The price for redemption is determined based on the simple average closing price of gold with 999 purity in the previous 3 working days, as reported by the India Bullion and Jewellers Association Ltd (IBJA). 

Investors can initiate early redemption of their SGBs after 5 years from the date of SGB issuance, coinciding with the interest payment date. SGB 2019-20 Series-IX and 2020-21 Series-V is up for premature redemption on 11 August 2025 at a price of ₹10,070 per unit per SGB.

Sovereign Gold Bond Price History

The price history of SGB for FY 2023-24 is as follows:

Sovereign Gold Bond Tax Exemption Under Section 80C

There are no tax deduction benefits for the lump sum deposit of SGBs under Section 80C of the Income Tax Act. The interest given on SGB deposits is also not tax-free. The interest amount must be declared under ‘Income from Other Sources’ during tax returns. The income tax will be as per the individual’s income tax slab. Tax Deducted at Source (TDS) is not applicable on SGBs. However, they are exempt from capital gains tax when held till maturity.

Gold Sovereign Bonds are new-age investment vehicles for those interested in diversifying their portfolio with gold holdings. 

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