Forget Physical Gold, This RBI Gold Scheme Is Giving Massive 251% Returns
The Sovereign Gold Bond (SGB) 2017-18 Series-II, issued on July 28, 2017, matured on July 28, 2025, with a redemption price of Rs 9,924 per gram, reflecting a remarkable 250.67 percent capital gain over the original issue price of Rs 2,830. In addition, investors earned 2.5 percent annual interest, totaling approximately 20 percent over the 8-year tenure. While this interest is taxable, capital gains for individuals upon maturity are exempt from tax. Issued by the RBI for the Government of India, SGBs are a secure and convenient alternative to physical gold, offering market-linked returns without storage risks or making charges.
Final Redemption Date and Price
The Reserve Bank of India (RBI) has set the final redemption of Sovereign Gold Bond (SGB) 2017-18 Series-II on July 28, 2025, at a price of Rs 9,924 per gram.
Calculation of Redemption Price
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The redemption price is determined by the simple average of the closing price of gold of 999 purity for the week preceding the date of redemption (July 21–25, 2025), as published by the India Bullion and Jewellers Association Ltd (IBJA).
Issuance Details and Returns
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This SGB tranche was issued on July 28, 2017, at an issue price of Rs 2,830 per gram (excluding online discount). The final payout provides investors with a 250.67 percent return (Rs 7,094 gain per unit) over the 8-year holding period, excluding interest.
Interest Earnings
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Investors also earned a 2.50 percent annual interest (paid semi-annually) on the nominal value throughout the tenure, leading to a cumulative interest gain of around 20 percent across the maturity period.
Taxation Benefits
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Interest income on SGBs is fully taxable as per the Income-tax Act, 1961. Capital gains on maturity are exempt from tax for individuals, making the redemption proceeds tax-free. Indexation benefits are provided if SGBs are transferred before maturity.
What Are Sovereign Gold Bonds?
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SGBs are government securities denominated in grams of gold, issued by the RBI on behalf of the Government of India. They serve as a paper and digital alternative to physical gold, with cash-based issuance and redemption.
Advantages Over Physical Gold
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SGBs protect the quantity of gold purchased, offer returns linked to the current market price at redemption, avoid storage risk/costs, and have no concerns about making charges or purity, unlike gold jewelry. Bonds can be held in demat or RBI records, reducing risk of loss.
