Sovereign Gold Bond 2017 18 Series II delivers 250% return on maturity; details here

In a significant announcement for gold investors, the Reserve Bank of India (RBI) has declared the final redemption price of the Sovereign Gold Bond (SGB) 2017-18 Series II at ₹9,924 per gram. This payout, due upon maturity on July 28, 2025, represents a striking 250.67% return over eight years, excluding the fixed 2.5% annual interest paid semi-annually. The redemption value is calculated using the average gold prices between July 21 and July 25, 2025, as published by the India Bullion and Jewellers Association (IBJA).

Originally issued in July 2017 at ₹2,830 per gram (₹2,780 for digital applications), this SGB series has provided investors with remarkable capital appreciation, mirroring the sustained rally in global and domestic gold prices over the past eight years. Beyond the headline return, investors also enjoyed the benefit of sovereign backing, regular interest income, and the comfort of a tax-exempt maturity payout.

SGBs stand out as a modern, efficient alternative to physical gold. While physical holdings come with risks like purity concerns and storage costs, SGBs are paperless, secure, and highly liquid. Investors can exit the bond via early redemption from the fifth year or trade them on the secondary market. Additionally, capital gains from holding SGBs to maturity are entirely tax-free, further boosting their appeal among tax-conscious investors.

The principal and interest amount upon maturity is automatically credited to the investor’s bank account, eliminating the friction often associated with encashing physical gold. These benefits have made SGBs especially popular among retail investors looking for a low-risk, high-yield way to diversify their portfolios.

With this tranche set to mature, attention now turns to the future of the Sovereign Gold Bond scheme. The government last issued an SGB tranche in February 2024 and is currently reviewing market conditions before announcing new issuances. According to a statement by the Ministry of Finance in the Rajya Sabha on July 22, 2025, future SGB offerings will depend on their cost-effectiveness as a borrowing tool. Rising gold prices have increased the government’s borrowing cost through this route, prompting a temporary pause.

“The Government of India mobilises resources through various instruments, including Government Securities, Treasury Bills, and Sovereign Gold Bonds,” said Union Minister of State for Finance Pankaj Chaudhary. “A decision on the mode of mobilising resources is taken after due consideration of the relative costs to the Government.”

This strategic evaluation reflects the dual role of SGBs: providing a safe, interest-bearing investment to the public while also reducing India’s reliance on physical gold imports, which exert pressure on the country’s current account.

The stellar performance of the 2017-18 Series II SGB has reaffirmed the product’s effectiveness and reliability. In a landscape marked by inflationary pressures, market volatility, and geopolitical uncertainty, gold continues to serve as a trusted asset. SGBs offer a smarter, tax-efficient gateway to gold exposure—delivering security, returns, and convenience without the complications of physical ownership.