The Reserve Bank of India (RBI) has announced the premature redemption date and price for Sovereign Gold Bonds 2020-21 Series VII, which will give investors a handsome return of 153 per cent in five years. The persons who want to make an investment and want to earn a good profit, then this can be a good opportunity for them. But like any other investment options, here too, you have to understand some calculation first.

Details of the investment option

The redemption price has been fixed at ₹12,792 per unit based on the average closing price of 999 purity gold published by the India Bullion and Jewellers Association (IBJA) between October 15 and 17, 2025.

SGB Series VII was originally issued at ₹5,051 per gram on October 20, 2020. This means investors have made a profit of ₹7,741 per gram, or approximately 153 percent, excluding the additional half-yearly interest of 2.5 percent per annum earned during the investment period. Sovereign Gold Bond Scheme, launched by the government, allows investors to invest in gold without physically holding it.

Tax benefits

Each bond has a maturity of eight years, with the option of premature redemption after five years. Investors also receive tax benefits, as no capital gains tax is applicable on redemption after maturity. The redemption price is determined using the average closing price of gold (999 purity) for the three working days preceding the redemption date. This ensures a transparent and fair valuation linked to market rates. Investors who wish to opt for premature redemption will need to confirm the date of issue and the series of their SGB holdings to ensure eligibility. They will need to submit their redemption requests through their respective banks, post offices, or agents managing their SGB accounts within the timeframe specified by the RBI.

With this announcement, the RBI has once again highlighted the strong performance of gold as an investment asset, offering both stability and attractive long-term returns.

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