RS 1 LAKH INVESTMENT IN SGB 2019-20 SERIES IV: HOW MUCH COULD IT BE WORTH AT SEPTEMBER REDEMPTION? SEE CALCULATIONS

Investors who bought Sovereign Gold Bond (SGB) 2019-20 Series IV in September 2019 have another opportunity to exit their investment this month. The tranche is due for premature redemption on September 17, 2026.

The investment has already completed seven years, and the sharp rise in gold prices since 2019 means early investors could be sitting on sizeable gains.

But how much could an investment of around Rs 1 lakh be worth today? Let us look at the numbers.

SGB 2019-20 Series IV was open for subscription from September 9 to September 13, 2019, and was issued on September 17, 2019. The issue price was fixed at Rs 3,890 per gram. Investors who applied online and made payment digitally received a discount of Rs 50 per gram, taking their purchase price down to Rs 3,840 per gram.

How many SGB units could Rs 1 lakh buy?

SGBs are issued in multiples of one gram, so an investor cannot buy a fraction of a unit.

At the online issue price of Rs 3,840 per gram, an investor could have bought 26 grams for:

26 × Rs 3,840 = Rs 99,840

So, an investment of almost Rs 1 lakh would have given the investor 26 units of SGB. Those who did not get the online discount paid Rs 3,890 per gram. At that price, Rs 1 lakh could have purchased 25 units for Rs 97,250.

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What could Rs 99,840 be worth now?

The final redemption price for September 17 has not yet been announced by RBI.

Under SGB rules, the redemption value is calculated using the simple average of the closing price of 999-purity gold published by the India Bullion and Jewellers Association for the three business days before redemption.

The gold rate was around Rs 15,133 per gram as of September 2, 2026. This is the India Bullion and Jewellers Association's (IBJA's) 999-purity gold rate. 

Let's calculate the September redemption price at this rate for a rough estimation.

On this price, the calculation for 26 units would look like this:

Rs 15,133 × 26 grams = Rs 3,93,458

Principal amount or total investment: Rs 99,840

Estimated value: Rs 3,93,458

Estimated gain: Rs 2,93,618

From the above calculations, we can understand the original investment would have grown almost four times the amount invested. This amount doesn't include the interest earned over the years.

SGB offers 2.5% annual interest

SGB investors also receive interest at 2.5 per cent per annum on their initial investment, paid every six months.

On an investment of Rs 99,840, annual interest works out to around Rs 2,496.

Over seven years, this comes to roughly Rs 17,472, assuming the investor held the bonds throughout the period.

Adding this to the estimated redemption value means the investor could have received around Rs 4.11 lakh in total over seven years. However, the interest was paid periodically and is taxable according to the applicable income-tax rules.

Deadline for redemption request

Investors who want to use the September 17 premature-redemption option need to act within the prescribed window. For SGB 2019-20 Series IV, requests can be submitted from August 17 to September 7, 2026.

Those who do not redeem can continue holding the bond. Its scheduled eight-year maturity is September 17, 2027.

New tax rules

There is another important point for investors considering an early exit. From April 1, 2026, the capital-gains exemption on SGBs is restricted to individuals who subscribed at the original issue and hold the bonds continuously until maturity.

According to the Income Tax Department's Budget 2026 FAQs, premature redemption is no longer eligible for this exemption.

Please note that this is not the final calculations. The final amount investors receive on September 17 will depend on the redemption price announced by the RBI closer to the date. If gold prices move sharply before then, the actual payout can be higher or lower than the calculation above.

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2026-09-02T10:14:22Z