Gold Return: Government gold scheme yields huge profits for investors; an investment of ₹1 lakh has grown to ₹3.33 lakh..

If you invested in the government's Sovereign Gold Bond (SGB) scheme five years ago, consider yourself lucky—it’s like hitting the jackpot. The Reserve Bank of India has fixed the pre-mature redemption price for SGB 2020-21 Series XII at ₹15,355 per unit.

This bond was launched on March 9, 2021. Under the rules, there is an option for early redemption (selling the bond back) after the completion of five years. Investors who put ₹1 lakh into this scheme in 2021 have seen their investment grow to ₹3.33 lakh today—a massive return of over 232%.

Let’s break down the math to understand how an investment of ₹1 lakh turned into ₹3.33 lakh, alongside the additional benefit of interest earned.

How did the ₹1 lakh investment turn into ₹3.33 lakh?

When this series was launched in March 2021, online buyers received a discount of ₹50. Investors in both categories have reaped substantial profits:

Calculation for online buyers (including the ₹50 discount):

Issue price (purchase price): ₹4,612 per gram

Redemption price (current price): ₹15,355 per gram

Profit per gram: ₹10,743

Total return: 232.94% (3.33 times the profit)

With ₹1 lakh, you acquired approximately 21.68 grams of gold back then. Based on the current price of ₹15,355 per gram (as of September 9, 2026), that same holding is now valued at ₹3.33 lakh.

Calculation for offline buyers:

Issue price: ₹4,662 per gram

Calculation for ₹1 lakh: Bonds worth ₹1 lakh purchased offline are now valued at ₹3.29 lakh. Additional 2.5% Fixed Interest

The figure of ₹3.33 lakh accounts solely for the appreciation in gold prices. The real advantage of this scheme is that it also offers separate interest earnings. Under the SGB scheme, the government pays a guaranteed interest of 2.5% per annum on the principal investment amount, credited directly to the bank account every six months. In other words, not only was there a 232% gain over five years, but there was also the added benefit of receiving interest payments every six months throughout that period.

How was the ₹15,355 rate determined?

According to the RBI, the redemption price is determined based on the average closing price of 999 purity (24-carat) gold—as published by the India Bullion and Jewellers Association (IBJA)—during the three working days immediately preceding the redemption date (September 4, 7, and 8, 2026).

Can you also withdraw your money?

The total tenure of an SGB is eight years. However, the RBI allows investors an early exit option after the completion of five years. For 'Series XII' (issued on March 9, 2021), the RBI has set the redemption date for September 9, 2026.

Important Note: This rate of ₹15,355 applies only to SGB 2020-21 Series XII. If you hold a bond from a different series, please verify its issue date and series details before claiming redemption.

Disclaimer: This content has been sourced and edited from Money Control. While we have made modifications for clarity and presentation, the original content belongs to its respective authors and website. We do not claim ownership of the content.