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RBI Announces Final Redemption Price for Sovereign Gold Bonds 2017-18 Series VI: Investors Earn Over 316% Return

The Reserve Bank of India (RBI) has officially announced the final redemption price for the Sovereign Gold Bond (SGB) 2017-18 Series VI, bringing great news for long-term investors. The bond, originally issued on November 6, 2017, has completed its eight-year maturity period, and investors are now eligible for redemption on November 6, 2025.

According to RBI, the final redemption price has been fixed at ₹12,066 per unit, compared to its original issue price of ₹2,895. This translates to an impressive 316.78% return, excluding the annual interest income of 2.5% per annum that investors have earned during the bond’s tenure.

Massive Gains Driven by Gold Price Surge

The phenomenal return reflects the strong rally in gold prices over the last eight years. When the bond was launched, investors making online payments received a ₹50 discount, bringing the effective purchase price to ₹2,845 per gram. Based on this, the overall return stands at an extraordinary 324.11%, highlighting the power of long-term investment in gold-backed securities.

The continuous rise in global and domestic gold rates — driven by inflation concerns, geopolitical tensions, and currency fluctuations — has been a key contributor to this high return.

How RBI Calculated the Redemption Price

In its official statement, the RBI explained that the redemption value for SGBs is calculated based on the average closing price of gold (999 purity) published by the India Bullion and Jewellers Association (IBJA) over the last three business days before redemption. For this series, the average was taken from October 31, November 3, and November 4, 2025.

The maturity period for all SGBs is eight years from the date of issuance, with an option for early redemption available after five years on any interest payment date.

Redemption and Taxation Rules

Under the SGB scheme guidelines, investors can redeem bonds early after five years, but most prefer to hold them until maturity since capital gains on redemption are completely tax-free.

However, the annual interest of 2.5% earned by investors is taxable under the Income Tax Act, depending on the individual’s income tax slab. If an investor chooses to sell the bonds in the secondary market before maturity, the long-term capital gains (LTCG) are eligible for indexation benefits, which help reduce the tax liability.

Benefits of Investing in Sovereign Gold Bonds

SGBs provide a dual benefit to investors — they not only earn capital appreciation linked to gold prices but also receive a fixed annual interest credited semi-annually to their bank account. Since these are government-backed instruments, they offer a safe, paperless alternative to physical gold without storage or purity risks.

Key advantages of SGBs include:

• Guaranteed interest income of 2.5% per annum.

• No capital gains tax on maturity.

• Freedom from making or storage costs associated with physical gold.

• Eligibility to trade or use as collateral for loans.

The Purpose and Evolution of the SGB Scheme

Launched in November 2015, the Sovereign Gold Bond Scheme was introduced by the Government of India to discourage physical gold purchases and channel household savings into financial instruments. Issued by the RBI on behalf of the central government, these bonds are denominated in grams of gold and serve as a secure investment option.

The program helped reduce India’s dependence on gold imports and promoted long-term financial savings. However, in October 2023, the government decided to discontinue new SGB issuances, citing high management costs and the growing popularity of alternatives like Gold ETFs and digital gold.

What Investors Should Know Now

Although new issues have stopped, all previously issued Sovereign Gold Bonds remain valid. Investors holding earlier series, such as the 2017-18 batch, can either hold them until maturity or opt for premature redemption as per RBI guidelines. These bonds can also be traded on stock exchanges, providing liquidity for investors who wish to exit before the full term.

Conclusion

The SGB 2017-18 Series VI has proven to be one of the most rewarding investment opportunities, delivering over 316% returns in eight years, excluding interest. It reaffirms gold’s status as a stable and inflation-resistant asset in uncertain times.

With the RBI ensuring transparent pricing and the government offering tax-free capital gains, Sovereign Gold Bonds continue to stand out as a safe, lucrative, and disciplined way to invest in gold — without the hassle of physical ownership.