Gold bond bought in 2021 now worth nearly three times its price; RBI sets ₹14,167 for early redemption of SGB 2021-22 Series VII

People who bought the government's Sovereign Gold Bonds (SGBs) in late October 2021 can redeem them early at ₹14,167 per gram on 2 November 2026, the Reserve Bank of India said on Friday evening. That is close to three times what they paid.

The price applies to SGB 2021-22 Series VII, which was open for subscription from 25 to 29 October 2021 and issued on 2 November 2021.

How much investors have gained

According to the RBI's October 2021 notice, the issue price of this tranche was ₹4,761 per gram, with a discount of ₹50 a gram for investors who applied and paid online, making it ₹4,711.

By our calculation:

• An investor who paid ₹4,761 gets ₹9,406 more per gram, a gain of about 198 per cent. Each gram is now worth about 2.98 times its cost.
• An online buyer who paid ₹4,711 gains ₹9,456 per gram, or just over 200 per cent.
• For 10 grams, an investment of ₹47,610 at the offline price now fetches ₹1,41,670.

These figures do not include interest. SGBs pay 2.5 per cent a year on the original issue price, credited every six months. By our calculation, that adds about ₹119 per gram a year, or roughly ₹595 per gram over five years, before tax.

How the redemption price is set

The RBI said the redemption price is the simple average of the closing price of 999-purity gold, as published by the India Bullion and Jewellers Association (IBJA), over the three business days before the redemption date. For this tranche, those days were 28, 29 and 30 October 2026.

The same method is used at issue, which is why SGB returns track the price of physical gold closely.

Why early redemption is allowed now

SGBs have a term of eight years, so this tranche matures in November 2029. The scheme rules allow investors to exit early after the fifth year, but only on the dates when interest is due. The fifth anniversary of this tranche falls on 2 November 2026, making it the first date on which holders can redeem with the government.

Investors who want to redeem must apply through the bank, post office, Stock Holding Corporation of India or agent through which they hold the bond, or through their depository participant if the bond is in a demat account. Requests have to reach the issuing agency some days before the interest date. Holders who have missed the window for 2 November can apply for the next interest date, six months later, at the price fixed then.

The tax angle

How the gain is taxed depends on how an investor exits:

• Redeeming with the RBI, whether early or at maturity, has been exempt from capital gains tax for individuals under the Income Tax Act.
• Selling on a stock exchange is treated as a transfer, and any profit can attract capital gains tax.
• The 2.5 per cent interest is taxable every year at the investor's income tax slab rate.

Tax rules change, so investors with large holdings should confirm the current position with a tax adviser before deciding.

Redeem now or wait?

The RBI notice does not offer advice, and neither do we. But holders weighing the choice may want to consider:

• Holding to maturity keeps the 2.5 per cent interest coming for three more years and leaves the bond fully exposed to gold prices, which can fall as well as rise.
• Redeeming now locks in today's price and frees the money for other needs.
• Selling on the exchange is possible on any trading day, but SGBs often trade at a discount to the gold price and volumes can be thin.

About the scheme

The Sovereign Gold Bond scheme was launched in November 2015 to give households a way to invest in gold without buying physical metal, which has to be imported and stored. The bonds are issued by the RBI on behalf of the Government of India and are denominated in grams. For the government, they are a form of borrowing. Because the government repays investors at the gold price of the day, a sharp rise in gold prices increases the cost of redeeming these bonds.

Several older tranches are now in their early-redemption window, and the RBI publishes a fresh redemption price before each interest date. Readers who want to understand how RBI policy affects other savings can see our explainer on the repo rate.

Correction, 31 October 2026: An earlier version of this story said the RBI announced the price on Thursday. It did so on Friday, 30 October.