The Reserve Bank of India (RBI) has released the premature redemption schedule for Sovereign Gold Bonds (SGB) 2025 for the period from April to September 2025. According to the schedule, there are three SGBs that are due for premature redemption in the month of April.Gold prices have recently hit new highs. Many SGB investors must be wondering if they go for pre-mature redemption now, how much they are likely to earn.
ET Wealth has done some calculations on how much SGB investors are expected to earn if they go for premature redemption in the month of April.
Also read: Sovereign Gold Bond 2025: RBI announces SGB premature redemption dates from April – September 2025; Check details
What will be the price of premature redemption?
According to SGB scheme rules, the premature redemption price is calculated as a simple average of the closing price of gold of 999 purity of the previous three business days from the date of repayment, published by the India Bullion and Jewelers Association Limited.For calculation, here we have the closing price of gold for the previous three days from today. On March 21, the gold rate was recorded at Rs 88,169, while on March 20, it was Rs 88,506, and on March 19, it stood at Rs 88,649. When these three business day rates are averaged, the resulting gold price is approximately Rs 88,441.
If the premature redemption happens today, an SGB investor is likely to get Rs 8,841 per gram of gold.
Which three SGBs are due for premature redemption in April 2025?
The following three SGBs are due for premature redemption in April 2025:
a) SGB 2017-18 Series III, issued on October 16, 2017, is due for premature redemption on April 16, 2025,
b) SGB 2017-18 Series IV, issued on October 23, 2017, is due for premature redemption on April 23, 2025,
c) SGB 2017-18 Series V, issued on October 30, 2017, is due for premature redemption on April 30, 2025.
How much return SGB investors are likely to earn
The above-mentioned SGBs were issued at the following price:
a) SGB 2017-18 Series III, issued price was Rs 2,956
b) SGB 2017-18 Series IV, issued price was Rs 2,987
c) SGB 2017-18 Series V, issued price was Rs 2,971
Hence, investors of the SGB 2017-18 Series III are likely to earn 199% absolute returns without taking interest payments into account.
Similarly, investors of the SGB 2017-18 Series IV are likely to earn 195% absolute returns without taking interest payments into account.
Investors of SGB 2017-18 Series V are likely to earn 197% absolute returns without taking interest payments into account.
Investors should remember that these calculations can change if the price of the gold changes before the premature redemption dates.
Due date to submit premature redemption request
The SGB issuance has separate issue dates for each tranche. The schedule specifies the precise date on which each tranche was issued.
For each tranche, a designated date has been set for premature redemption. Investors who choose to exit the scheme early can redeem their bonds on these specified dates.
The notification also specifies when each tranche’s redemption requests must be submitted. To guarantee that the request is handled, and the early redemption is carried out without hiccups, it is imperative that certain deadlines be met.
For the SGB 2017-18 Series III, the premature redemption date is set for April 16, 2025, and investors must submit their premature redemption requests to the Receiving Offices/NSDL/CDSL/RBI Retail Direct between March 17 and April 7.
For the SGB 2017-18 Series IV, the premature redemption date is set for April 23, 2025, and investors must submit their premature redemption requests to the Receiving Offices/NSDL/CDSL/RBI Retail Direct between March 24 and April 15.
For the SGB 2017-18 Series V, the premature redemption date is set for April 30, 2025, and investors must submit their premature redemption requests to the Receiving Offices/NSDL/CDSL/RBI Retail Direct between March 31 and April 21.
What investors need to do for premature redemption
Investors holding SGBs should review the redemption schedule carefully. Some of the Key actions include:
a) Identify the tranche to which your bonds belong by checking the issue date. This is the date when the bonds can be redeemed before maturity.
b) Ensure that your request for premature redemption is submitted by the deadline mentioned in the schedule.
What are the procedures involved during premature redemption?
The investor will be advised one month before maturity regarding the ensuing maturity of the bond. On the date of maturity, the maturity proceeds will be credited to the bank account as per the details on record.
In case there are changes in any details, such as bank account numbers and email IDs, then the investor must inform the bank/SHCIL/PO promptly. Source Link
