This gold bond doubled the investors' money in just 5 years, the effect of the rise in gold prices

By Siddhi Jain | Sep 8, 2025, 18:58 IST

Sovereign Gold Bond Doubles Investors’ Money in Just 5 Years as Gold Prices Soar

New Delhi, Sep 8, 2025 – Investors who subscribed to the Sovereign Gold Bond (SGB) 2020-21 Series VI have plenty of reasons to cheer. The scheme, launched on September 8, 2020, at a fixed price of ₹5,117 per gram of gold, has delivered outstanding returns. When the premature redemption window opened on September 6, 2025, the Reserve Bank of India (RBI) fixed the redemption price at ₹10,610 per gram, effectively doubling the investment in just five years.

A Strong Return Backed by Gold Rally

The sharp rise in global and domestic gold prices has been a major factor in this windfall. Besides the significant capital gains, investors also enjoyed an annual interest rate of 2.5% on their holdings throughout the investment period. This combination of fixed interest plus rising gold prices made the bond one of the most rewarding investment options in recent years.

The premature redemption window, which opened on September 6, allowed eligible investors to cash out before the eight-year maturity period. Those who missed the window will have to wait for the next redemption cycle.

How the Sovereign Gold Bond Works

The Sovereign Gold Bond scheme, introduced by the Government of India in 2015, is designed as an alternative to physical gold investments. Instead of purchasing gold jewelry or bars, investors buy these RBI-issued bonds that track gold prices while also offering fixed interest.

Tenure: 8 years (with an option to exit after 5 years)
Returns: Gold price appreciation + 2.5% annual interest
Mode of redemption: Amount credited directly to the investor’s registered bank account

For Series VI of 2020-21, investors have now reaped nearly 100% returns in five years, with the added advantage of tax benefits on redemption.

Government Data Shows Growing Popularity

According to Minister of State for Finance Pankaj Chaudhary, by March 31, 2025, the government had issued 67 tranches of SGBs, raising investments worth nearly ₹72,275 crore. This corresponds to about 146.96 tonnes of gold, out of which 18.81 tonnes had already been redeemed by June 15, 2025.

Chaudhary added that heightened geopolitical tensions had driven gold prices sharply upward. As a result, the government has not released a new tranche of SGBs since February 2024, and future issuances will depend on a reassessment of pricing and market conditions.

Why Gold Investments Are Surging

Gold has long been considered a safe-haven asset, and the recent global uncertainties have only reinforced its appeal. In 2025 alone, gold delivered a return of over 40%, making it one of the best-performing asset classes of the year. Analysts predict that if geopolitical tensions persist, gold prices could continue their upward trend. Some forecasts suggest prices may reach ₹1.27 lakh per 10 grams by mid-2026.

This bullish outlook is encouraging more investors to turn toward gold-linked instruments such as SGBs, which not only provide exposure to rising gold prices but also offer government-backed security and fixed annual returns.

Key Takeaways for Investors

Investors in SGB 2020-21 Series VI saw their money double in just five years.
In addition to price appreciation, they earned 2.5% annual interest.
The redemption price in September 2025 was ₹10,610 per gram, compared to the issue price of ₹5,117 per gram in 2020.
Sovereign Gold Bonds mature in 8 years, but investors can exit after the 5th year through early redemption windows.
The scheme continues to be a popular, safe, and tax-efficient alternative to physical gold investments.

Outlook Ahead

With gold prices on a strong upward trajectory, the Sovereign Gold Bond scheme has once again proven to be a wealth-creating instrument. Experts believe that as long as global uncertainties remain high, demand for gold and gold-backed investments will continue to rise. For investors seeking a mix of safety, assured returns, and long-term growth, SGBs remain a compelling choice.