Is it possible to encash the Sovereign Gold Bond (SGB) at any time, including through premature redemption?

Although the Sovereign Gold Bond (SGB) has a tenor of 8 years, it can be redeemed prematurely on coupon payment dates after the 5th year from the issue date. A charge of ₹150 + 18% GST will be imposed for rematerialisation or redemption. To redeem the SGB after the fifth year, complete and sign the redemption form (PDF) and send it to the following address:

Zerodha,
153/154, 4th Cross, J.P Nagar 4th Phase,
Opp. Clarence Public School,
Bengaluru - 560078

The request for early redemption will be processed only if the forms are received at least 10 working days before the coupon payment date. The proceeds from the redemption will be credited to the bank account linked to the Zerodha 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. To learn more about SGBs, visit m.rbi.org.in/scripts/FAQView.aspx?Id=109.

Did you know? Gold bonds are tradable on exchanges and can also be sold in the secondary market, but their liquidity may be limited.