Sovereign Gold Bond (SGB) 2017–18 Series XIV matured today, January 1, 2026. With this, investors in this series have received a return after 8 years that has set a new record in the history of SGBs.
This bond was issued on January 1, 2018, and according to government rules, the full redemption of the SGB takes place in the eighth year upon maturity.
The Reserve Bank of India had already announced the final redemption process for this series.
How was the 367% return generated in 8 years?
The issue price of the 2017–18 Series XIV was Rs 2,890 per gram.
On January 1, 2026, its redemption price was fixed at Rs 13,486 per gram.
Based on the gold price alone, investors gained approximately Rs 10,596 per unit. This is a direct return of approximately 367%, which is equivalent to about 21% per annum (CAGR) over 8 years.
In addition, a special feature of SGBs is that investors also receive a fixed interest of 2.5% every year.
Over eight years, this interest amounts to approximately Rs 578 per unit. Thus, the total effective return reaches approximately 387%. The good thing is that this price gain received at maturity is tax-free, while the interest is taxed according to the investor’s tax bracket.
How much would a Rs 1 lakh investment be worth today?
If an investor had invested Rs 1 lakh in this SGB in January 2018, they would have been able to buy approximately 34.6 grams of gold. Today, upon redemption, the value of this investment would be approximately Rs 3.67 lakh. Additionally, approximately Rs 20,000 in interest would be received separately over eight years. This means that a total amount of Rs 1 lakh would transform into approximately Rs 3.87 lakh—all without any capital gains tax.
How is the redemption price determined?
The redemption price of SGBs is not determined arbitrarily. It is based on the average closing price of 999 purity gold over the previous three business days, as published by the India Bullion and Jewellers Association. Based on this formula, the price for January 1, 2026, was set at Rs 13,486 per gram.
Rules for premature and full redemption
The total tenure of SGBs is eight years, but investors also have the option to exit after the fifth year. This premature redemption can be done on the interest payment dates, which occur every six months. However, investors who hold the bonds for the full eight years benefit from full redemption, and there is no capital gains tax on it.
Which series have given the biggest returns so far?
The initial series of SGBs—especially those issued between 2015 and 2018—have proven to be the most profitable for investors. But the 367% return of the 2017–18 Series XIV is considered among the highest returns to date. Several earlier series also saw returns of 250% to 300%, but the current surge has put this series at the forefront.
Massive surge in gold prices
In the last two to three years, gold prices have witnessed an extraordinary surge. Global uncertainty, fluctuations in interest rates, and the demand for safe-haven investments have pushed gold to new heights. Due to this sharp increase, the government has temporarily stopped issuing new Sovereign Gold Bonds, as issuing bonds at such high prices has become an expensive proposition for the government.
Why SGBs remained a special investment option
SGBs freed investors from the hassles of physical gold—no storage worries, no making charges. On top of that, they offered an annual interest of 2.5% and tax-free returns on maturity. This is why series like the one from 2017-18 have become exemplary for investors today.
The first redemption of the new year 2026 has once again proven how much benefit a gold investment made at the right time and with patience can yield in the long run.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Please consult a qualified professional before making investment decisions.
