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Summary: An investor holding 20 units of sovereign gold bonds is approaching maturity and wants to know whether the payout can be delivered in physical gold rather than cash. Here's what the SGB rules actually permit, and how redemption is calculated.
I have 20 units of sovereign gold bonds that are maturing soon. Can I get 20 grams of gold in addition to cash in exchange for this? – Anonymous
No. Investors cannot claim physical gold when their sovereign gold bonds (SGBs) mature.
SGBs are an alternative to holding physical gold: investors pay the issue price in cash and are redeemed in cash on maturity. They can also be redeemed prematurely after a five-year lock-in from the issue date, on the interest payment dates.
The maturity redemption price is the average closing price of 24-carat gold over the three business days before the maturity date, as published by the India Bullion and Jewellers Association Limited. For premature redemptions, the same three-day average applies, ending before the redemption date.
The proceeds are credited to the bank account the investor provided when buying the bond.
For premature redemption, requests must be submitted to the relevant bank, SHCIL office, post office or an agent within a 30-day window prior to the coupon payment date. Note that capital gains are taxable on premature redemption or encashment of SGBs.
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This article was originally published on April 19, 2023, and last updated on June 17, 2026.
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