The final redemption for Sovereign Gold Bond SGB 2017-18 Series-II is due today. The Reserve Bank of India (RBI) announced the final redemption price with these SGBs reaching their mandated expiry period of eight years from the date of issuance.
The RBI has fixed the final redemption price at Rs 9,924 per unit of sovereign gold bonds (SGBs) based on the simple average of closing gold price for the week July 21- 25, 2025.
The redemption price of SGB is calculated based on the simple average of closing price of gold of 999 purity of the week (Monday-Friday), preceding the date of redemption, as published by the India Bullion and Jewellers Association Ltd (IBJA).
Sovereign Gold Bonds 2017-18 – Series II
The RBI announced the Sovereign Gold Bonds 2017 -18– Series II for subscription from July 10, 2017 to July 14, 2017. The date of issuance of the SGBs was July 28, 2017.
The issue price for SGB 2017-18 Series II in July 2017 was fixed at Rs 2,830 per gram and a discount of Rs 50 per unit on the issue price was offered to those investors who purchased online.
SGB 2017-18 Series II: Returns earned by investors
If we calculate the profit booked by investors of Sovereign Gold Bond (SGB) 2017-18 Series II, the return comes to a whopping 250.67% in 8 years based on the final redemption price of Rs 9,924.
This massive return is without considering the online discount of Rs 50 on the issue price and the semi-annually interest component. Remember, the SGB offers 2.5% annual interest on investment to bondholders.
Rules for premature SGB redemption
The SGBs are repayable on the expiration of eight years from the date of issuance. Pre-mature redemption, however, is permitted from the fifth year of the date of issue on the interest payment dates.
How investment in SGBs proved better than investment in physical gold
The quantity of gold for which the investor pays is protected, since he receives the ongoing market price at the time of redemption/ premature redemption.
The SGB offered a superior alternative to holding gold in physical form. The risks and costs of storage are eliminated. Investors are assured of the market value of gold at the time of maturity and periodical interest. Sovereign gold bonds are free from issues like making charges and purity in the case of gold in jewellery form. The bonds are held in the books of the RBI or in demat form eliminating risk of loss of scrip etc.