Sovereign Gold Bond (SGB) 2025: Upcoming Issue, Premature Redemption, Interest Rate & Issue Date

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 with many benefits compared to physical gold. 

Key Highlights:

• Sovereign Gold Bonds offer an interest of 2.5% p.a. on the investment amount.
• Sovereign Gold Bonds have a lock-in period (maturity period) of 8 years.
• Capital gains are exempt upon redemption of SGBs when held till maturity.
• SGBs can be prematurely redeemed after 5 years or traded on stock exchanges.

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 Bonds Scheme Details

• Maturity Period: The maturity period of SGBs is 8 years. However, premature redemption is allowed from the 5th year. 
• Interest Rate: The current interest rate for SGB is 2.50% p.a., paid twice a year (semi-annually) for 8 years.
• Minimum Investment: The minimum initial investment is 1 gram of gold per investor.
• Maximum Investment: The maximum limit of investment is 4 kg of gold per investor (individual and HUF). However, for entities such as trusts and universities, 20 kg of gold investment is permissible. 
• Tradability: Only RBI can issue SGBs on behalf of the Central Government, and they can be traded on the Stock Exchange. 
• Tax Benefits: There is no capital gains tax upon redemption of SGBs. 
• Collateral for Loans: SGBs can be used as collateral for loans.
• Redemption Price: The redemption price is in rupees, based on an average closing price of gold of 999 purity in the previous three working days.

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 Benefits

• Sovereign Gold Bonds provide guaranteed returns since it is a government-backed scheme. 
• You can earn a guaranteed annual interest at the rate of 2.50% (on the issue price).
• SGBs have low-risk since they come with a sovereign guarantee on the principal and the interest earned.
• You can trade gold sovereign bonds on stock exchanges within a specific date (at the issuer's discretion). For instance, after completing five years of investment, you can trade them on the National Stock Exchange or Bombay Stock Exchange, among others.
• Some banks accept SGB as collateral/security against loans pledged in Demat form. Hence, they will treat it as a gold loan after setting the loan-to-value (LTV) ratio to the value of gold. The India Bullion and Jewellers Association Limited determines this.

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?

• Purchase Sovereign Gold Bond 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.

How to Invest in Sovereign Gold Bonds​?

A person can apply for a Sovereign Gold Bond through his/her bank, Stock Holding Corporation of India Limited (SHCIL), designated post office and recognised stock exchange, 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. The process to purchase SGBs through a bank’s online website is as follows:

• Login to the bank’s internet banking account.
• Click on the ‘e-service’ option and choose the ‘Sovereign Gold Bond’ option.
• Read the terms and conditions and click the ‘Proceed’ option.
• Fill out the registration form and click the ‘Submit’ button.
• In the purchase form, enter the nominee details and subscription quantity.
• After verifying all the details, click the ‘Submit’ option and make the payment.
• You will receive a confirmation message along with the bond certificate in your email or Demat account.

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 2020-21 Series-VI is up for premature redemption on 6 September 2025 at a price of ₹10,610 per unit per SGB, based on the simple average price of the closing gold price for the three business days i.e., 3 September to 5 September 2025.

Sovereign Gold Bond Price History

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

The price history of SGB for 2022-23 is as follows:

Sovereign Gold Bond Tax Exemption

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, SGBs are exempt from capital gains tax when held till maturity. If SGBs are redeemed prematurely through RBI after the completion of five years, the proceeds are exempt from Long-Term Capital Gains (LTCG) tax. 

However, if the SGBs are sold on an exchange or transferred privately before its maturity period, the profits are treated as capital gains:

• Short-term capital gains (STCG): When they are held for less than one year, gains are taxed as per the individual's income tax slab.
• Long-term capital gains (LTCG): When they are held for more than one year, gains were taxed at 10% without indexation or 20% with indexation. But, for transfers made on or after 23 July 2024, it is taxed at 12.5% without indexation.

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

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