Sovereign Gold Bonds (SGBs) have once again shown why they are considered one of the most dependable long-term investment options in India. The SGB series that came up for redemption in November 2025 delivered remarkably high gains, surprising even seasoned investors.
These impressive returns are mainly due to the steady and strong rise in gold prices over the past several years. Investors who purchased SGBs during 2017–2021, when gold prices were much lower, are now benefiting from this long period of appreciation. Unlike physical gold, SGBs also avoid making charges, purity concerns, or storage issues—meaning the entire increase in gold value directly benefits the investor.
As a result, several SGB series redeemed in 2025 generated absolute returns ranging from 141% to more than 316%, making them one of the most rewarding government-backed instruments in recent times.
Recent SGB Series with High Returns in 2025
SGB 2017–18 Series VIII
- Maturity Date: 20 November 2025
- Issue Price: ₹2,951 per gram
- Redemption Price: ₹12,300 per gram
- Absolute Return: 316%
This is one of the highest-return SGBs so far, supported by the full 8-year holding period and tax-free maturity.
SGB 2020–21 Series II
- Premature Redemption: 19 November 2025 (5th year)
- Issue Price: ₹4,540 per gram
- Redemption Price: ₹12,330 per gram
- Absolute Return: 171%
Even with a shorter holding period, this series delivered excellent gains due to the sharp rise in gold prices after 2020.
SGB 2020–21 Series VIII
- Premature Redemption: 18 November 2025
- Issue Price: ₹5,177 per gram
- Redemption Price: ₹12,476 per gram
- Absolute Return: 141%
Despite being issued at a comparatively higher price, this series still produced strong double-digit annualized returns.
Why Did These SGBs Deliver Such High Returns?
1. Significant Appreciation in Gold Prices
Gold prices have grown steadily due to global economic uncertainty, rising demand for safe-haven assets, and currency movements. Since SGB redemption prices are directly linked to the market value of 999 purity gold, investors benefited fully from this upward trend.
2. Additional 2.5% Annual Interest
All SGB holders receive a fixed 2.5% interest per year on the issue price, paid every six months. This interest adds to the final return and provides steady income during the holding period.
3. Tax-Free Capital Gains at Maturity
For individual investors, capital gains earned on SGBs redeemed at the full 8-year maturity are completely exempt from tax.
Premature redemptions through RBI windows (after 5 years) also enjoy tax exemption, which makes the overall return even more attractive.
No Costs Related to Physical Gold
SGBs do not involve making charges, storage costs, or purity deductions.
Because of this, the entire increase in the price of gold benefits the investor directly.
Government Policy Update: No New SGB Issuances
In the Union Budget 2025, the government announced that no new SGB tranches will be issued going forward.
The main reasons included:
- Very high domestic gold prices
- Increasing interest payout obligations
- A need to review gold-linked liabilities
However, this decision does not affect existing SGBs.
All previously issued SGBs remain valid, and investors can:
- Hold them until maturity
- Redeem them with RBI after 5 years
- Buy or sell them on the secondary market (NSE/BSE)
Key Takeaways for Investors
- SGBs redeemed in 2025 stand out as one of the most rewarding long-term investments in recent years.
- Investors enjoyed high returns due to gold price appreciation, assured interest income, and tax-free gains at maturity.
- Even though fresh issuances have stopped, existing SGBs available in the secondary market continue to be a strong option for long-term wealth creation.
- Investors should, however, check secondary market pricing and compare it with current gold prices before purchasing.
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