Today, January 1, 2026, is the premature redemption date for Sovereign Gold Bonds (SGB) 2018–19 Series IV, according to the Reserve Bank of India (RBI). On January 1, 2019, the tranche was first released. As a result, it qualifies for early redemption under the SGB scheme’s five-year lock-in provision.
An Explanation of the Premature Redemption Date
Premature redemption under the Sovereign Gold Bond Scheme is allowed after five years from the date of issuance and only on days when interest is due, according to a notice from the Government of India dated October 8, 2018.
January 1, 2019 saw the release of the SGB 2018–19 Series IV tranche. As a result, on January 1, 2024, it will have completed five years and be available for early redemption on an interest payment date. According to this regulation, January 1, 2026 is the deadline for early redemption.
💰 SGB 2018–19 Series IV Premature Redemption
- Premature Redemption Date: January 1, 2026
- Eligibility: After 5 years from issuance (Jan 1, 2019)
- Redemption Price: Rs 13,486 per unit (1 unit = 1 gram of gold)
- Interest: Final semi-annual interest at 2.5% p.a.
- Mode: Cash payout; no physical gold delivery
📊 Investor Returns & Tips
- Purchase Price (Jan 2019): Rs 3,214/unit
- Price Gain: Rs 10,272/unit → ~320% absolute return
- Annualized Return: ~20% (based on gold price increase)
- Tax Implications: Early redemption taxable; long-term CG applies if held >3 yrs
- Recommendation: Redeem for liquidity or hold full 8 yrs for tax-free capital gains
Sovereign Gold Bond (SGB) 2018–19 Series IV Redemption Price Revealed
Whether redeemed at maturity or early, the value of Sovereign Gold Bonds depends on current gold prices. The price for the early redemption, due on January 1, 2026, has been determined using the simple average of the closing price of 999-purity gold over the preceding three business days, as reported by the India Bullion and Jewellers Association (IBJA).
Based on the gold prices for December 29, 30, and 31, 2025, the premature redemption price has been set at Rs 13,486 per unit of SGB. Every SGB unit is equivalent to one gram of gold.
What Investors Will Receive
On January 1, 2026, investors who choose to redeem their shares early will get:
- Each unit will receive a straight payment of Rs 13,486 to their bank account.
- The final interest payment, computed at 2.5% annually on the initial issue price.
It is important to note that no actual gold is supplied; instead, the redemption proceeds are paid in cash.
Tax Ramifications and Returns
In addition to profiting from the gradual increase in gold prices, investors would have made:
- Semi-annual interest payments of 2.5% yearly (taxable according to income bracket).
- Capital gains on early redemption are taxed, in contrast to final maturity. If bonds are held for more than three years, long-term capital gains tax rules apply, with indexation benefits.
Return on Investment for SGB 2018–19 Series IV Investors
Investors who purchased SGB 2018–19 Series IV in January 2019 at the issue price of Rs 3,214 per gram and choose to redeem their shares early on January 1, 2026, at Rs 13,486 per gram, would benefit from a price increase of Rs 10,272 per unit, resulting in an absolute return of around 320% over a seven-year period. This results in an annualized return of about 20% based just on the increase in the gold price.
Should Investors Redeem Early?
For investors who may require money or want to rebalance their portfolio at the beginning of the year, premature redemption provides liquidity. To take advantage of tax-free capital gains upon final redemption, investors who do not need urgent liquidity may decide to hold onto their investments for the full eight-year term.
How Early Redemption Operates
Investors may redeem SGBs early beginning in the fifth year, but only on the dates when semi-annual interest is paid. SGBs have an eight-year term. The investor’s bank, post office, or agency from whom the bond was acquired must be contacted to commence premature redemption, usually with a request made several days in advance.
