If you were among those who invested in the Sovereign Gold Bond scheme back in September 2019, the payoff today is nothing short of remarkable. The Reserve Bank of India has announced that the premature redemption price for the 2019–20 Series IX stands at ₹10,070 per gram. Considering that the original issue price was ₹4,070 per gram, this translates into a gain of ₹6,000 per unit and a total return of about 147 percent over five years. In terms of annualised returns, investors enjoyed a compounded growth rate of around 20 percent. These figures do not even include the additional 2.5 percent fixed annual interest that SGB investors receive, making the real returns even higher.
Another series, the 2020–21 Series V issued in August 2020, has also delivered impressive results. Its redemption price reflects a gain of ₹4,736 per unit, translating into an 89 percent total return and an annualised growth rate of roughly 13.5 percent. These numbers highlight the dual benefits of capital appreciation from rising gold prices and fixed interest income, making the SGB scheme one of the most rewarding government-backed investment options in recent years.
The Sovereign Gold Bond scheme was launched in November 2015 as part of the Gold Monetisation Scheme. Its primary aim was to encourage investors to shift from buying physical gold to holding gold in a digital form, thereby reducing the country’s reliance on imported gold. Managed by the Reserve Bank of India on behalf of the government, the scheme offered a safe, interest-bearing way to invest in gold while avoiding the costs and risks associated with storing physical bullion.
Any Indian citizen, Hindu Undivided Family, trust or institution could invest in SGBs, with a minimum investment of one gram and maximum annual limits of four kilograms for individuals and twenty kilograms for institutions. Each bond had a total tenure of eight years, but investors had the option for premature redemption after five years. Upon maturity or redemption, the payout was based on the prevailing market price of gold, in addition to the annual interest credited to the investor’s account.
Over the years, multiple SGB tranches have matured or become eligible for early redemption. Between April and September 2024, 26 series were redeemed early, while in the same period in 2025, that number rose to 33. The first-ever series from November 2015 has already fully matured, with investors receiving their final payouts.
In February 2024, the government decided to discontinue issuing new SGBs, citing the achievement of the scheme’s objectives along with changing investment trends and the administrative costs involved. Still, the performance of the 2019–20 Series IX and other recent tranches reinforces an important lesson for investors combining patience with a secure, government-backed product can yield outstanding results.
The exceptional performance of SGBs in recent years has been driven by the steady rise in global gold prices, supported by economic uncertainty, inflationary pressures and geopolitical risks. For investors, this asset class has proven its ability to preserve and grow wealth while offering steady income. The combination of price appreciation and fixed interest has been a winning formula, and those who held on through the full term are reaping substantial rewards today.
For more expert insights on investments, gold market trends and wealth-building strategies, follow You Finance on Instagram and Facebook.
