Sovereign Gold Bond 2018-19 Series II reaches its final redemption today. According to reporting by Livemint, investors stand to pocket gains of about 366%.
If you hold these bonds, the money should reach your bank account at the RBI fixed price. You'll also get your last interest payment. Here's how it works and what to do next.
Key takeaways
- This is the final redemption of SGB 2018-19 Series II, as reported by Livemint.
- The reported gain for investors is about 366%.
- RBI sets the redemption price, and bonds also pay 2.5% yearly interest.
- For individuals, the gain at maturity is tax free, but the interest isn't.
How SGB redemption works
A Sovereign Gold Bond is a government security. It's priced in grams of gold, so its value moves with the gold price. The Reserve Bank of India issues it on behalf of the government.
The bond runs for eight years. During that time, you earn interest of 2.5% a year on the amount you first put in. It's paid every six months.
At the end, you don't get physical gold. You get rupees. The price is based on recent gold prices, set under the scheme rules. You can check today's market price on our daily gold price page.
What the 366% gain means in rupees
Let's use a simple example. We don't know your exact buying price, so this is only an illustration. Say you put ₹1,00,000 into the bond eight years ago.
A gain of 366% means your money grew to 4.66 times. So the redemption value is ₹4,66,000. The interest comes on top of that.
| Item | Amount on ₹1,00,000 invested |
|---|---|
| Original investment | ₹1,00,000 |
| Gain at 366% | ₹3,66,000 |
| Redemption value | ₹4,66,000 |
| Interest at 2.5% for 8 years | ₹20,000 |
The interest works out to ₹2,500 a year on ₹1,00,000. Over eight years, that's ₹20,000. Your own numbers will differ based on what you paid.
Who is affected
This matters most to people who bought this exact series in 2018-19 and held on. Many families bought these bonds for a child's education or a wedding. They'll now see the money arrive.
It also matters if you hold other SGB series. Each series has its own maturity date. Check yours so you're not surprised.
On tax, individuals pay no capital gains tax when they hold the bond to maturity. The interest is taxed as income at your slab rate. If you're unsure, ask a tax adviser.
What to do now
The payout is automatic, but a few checks help. Here's a simple list.
- Check that your bank account linked to the bond is active.
- Look at your bond statement for the number of grams you hold.
- Watch for the credit in your account over the next few days.
- Note the interest part for your tax filing.
- Decide what the money is for before it arrives.
If you have a costly loan, paying it down can be smart. Use our EMI calculators to see how much interest you'd save. You can also compare current interest rates before parking the money.
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Frequently asked questions
Who pays the money on redemption?
The Reserve Bank of India handles the redemption on behalf of the government. The amount goes to your linked bank account.
Is the 366% gain tax free?
For individuals, capital gains on redemption at maturity are tax free. The 2.5% interest you earned is taxable as income.
Will I get physical gold?
No. The bond pays out in rupees at the redemption price. If you want physical gold, you'll need to buy it separately.
BankCreds analysis
A 366% gain looks huge, but it comes from eight years of holding. That's a long wait, not a quick win. Gold prices rose a lot over this period, and the bond's 2.5% interest added a little extra.
Think of a household that put ₹50,000 into this bond. It could get about ₹2,33,000 back, plus ₹10,000 of interest over eight years. That money can clear a loan or fund a goal.
Don't over-read it
This payout doesn't predict where gold goes next. Prices can also fall. Don't rush to buy gold because of this headline. Say you have a gold loan running at 10% or more. Paying it off first often saves more than a new gold bet.
This section is BankCreds' own assessment of what the development means for Indian borrowers and savers. It is independent commentary, not part of the source reporting above.
Sources & references
- Livemint — originating report https://www.livemint.com/money/personal-finance/sgb-2018-19-series-ii-final-redemption-today-investors-to-pocket-366-gains-check-the-rbi-fixed-price-interest-rate-11792726140993.html
- Reserve Bank of India — RBI issues Sovereign Gold Bonds and handles redemption https://www.rbi.org.in/
- Press Information Bureau — Government scheme notices for Sovereign Gold Bonds https://www.pib.gov.in/
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Editorial note & disclaimer
How this was reported. The development above is attributed to the source or sources listed. BankCreds does not independently verify a third party's reporting; where a figure or a regulatory position is stated as fact, it is either attributed or drawn from the regulator's own published material. Everything under "BankCreds analysis" is our own assessment.
Rates and figures. Interest rates, per-gram values and premium bands quoted here are indicative, move daily, and differ by borrower profile, city and lender policy. Confirm the final number with the institution before you act on it — the sanction letter or policy schedule governs, not a news report.
Not financial advice. This article is general information for an Indian audience. It is not investment, tax, credit or insurance advice, takes no account of your circumstances, and BankCreds is not a lender, broker, distributor or advisor. Consider speaking to a SEBI-registered investment adviser or a qualified professional before acting.
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