Can I encash the Sovereign Gold Bond (SGB) anytime I want? Is premature redemption allowed?
Though the tenor of the bond is 8 years, premature encashment or redemption of the bond is allowed after the 5th year from the date of issue on coupon payment dates. The rematerialisation/redemption charges of ₹150 + 18%GST will be charged.
To redeem SGB after the fifth year, you need to fill & sign the redemption form and send it to Zerodha head office . Request for premature redemption can only be processed if the forms are received at least 10 working days before the coupon payment date. The proceeds will be credited to your bank account linked with your Zerodha demat account.
At what price will the early redemption happen?
The early redemption will happen at the average gold price of the previous week published by the India Bullion and Jewelers Association Limited (IBJA).
RBI will open certain windows at the end of the 5th, 6th and 7th years when premature redemption of SGB will be allowed.
You can read more FAQs on SGBs on the RBI website .
Note: Gold bonds are listed and traded on the exchanges. They can also be sold in the secondary market but liquidity can be an issue.