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The Reserve Bank of India (RBI) has initiated the premature redemption period for Sovereign Gold Bond (SGB) 2020-21 Series-I, and this is a golden chance for investors. Investors can redeem the bonds at a fixed redemption price of ₹15,124 per unit from April 28, 2026.

Those who invested in this tranche in April 2020, at an issue price of approximately ₹5,000-₹5,100 per gram, can expect to pocket a nearly 230% gain in returns in six years, excluding 2.5% annual interest paid on a semi-annual basis.

This substantial return is a result of the strong bull run in gold prices over these years. Early redemption enables investors to capture gains without waiting for the maturity of 8 years.

Now, investors are weighing up their options of redemption and reinvestment versus holding hope for a higher profit. They advise considering individual tax scenarios, noting capital gains on SGBs are exempt from tax when held to maturity but can be subject to different tax rules if redeemed early.

This news underlines the success of Sovereign Gold Bonds as a secure interest-yielding gold investment.