The Sovereign Gold Bond (SGB) 2017-18 Series II, issued on July 28, 2017, is set to mature on July 28, 2025, offering investors a remarkable return of 250.67%. The Reserve Bank of India (RBI) has announced the final redemption price at ₹9,924 per gram. This substantial return does not include the additional 2.5% annual interest that investors have earned over the past eight years, paid semi-annually.

The SGB 2017-18 Series II was initially offered at ₹2,830 per gram. Investors who applied online received a discount of ₹50 per gram. The redemption price is calculated based on the simple average of the closing price of gold of 999 purity for the week of July 21 to July 25, 2025, as published by the India Bullion and Jewellers Association Limited (IBJA).

Sovereign Gold Bonds are considered a safe and convenient alternative to holding physical gold. These bonds are issued by the RBI on behalf of the Government of India and offer several benefits, including sovereign backing, regular interest payments, and tax exemptions on maturity. Unlike physical gold, SGBs eliminate the risks associated with storage and purity. They are held in paper or demat form, making them a secure and liquid investment option.

The SGB scheme was launched to provide investors with a way to invest in gold without the need to buy physical gold. The bonds are denominated in grams of gold, and the minimum investment is one gram. The maximum limit of subscription is 500 grams per person per fiscal year.

Interest earned on SGBs is taxable under the Income-tax Act, 1961. However, the capital gains tax arising on the redemption of SGBs to an individual is exempt. Indexation benefits are also provided for long-term capital gains arising from the transfer of the bond.

The bonds are repayable on the expiration of eight years from the date of issue. Premature redemption is permitted from the fifth year of the date of issue on interest payment dates. The receiving office informs the investor of the maturity date one month before maturity. SGBs can be used as collateral for loans, with the Loan to Value ratio as applicable to ordinary gold loans mandated by the RBI from time to time.

With the maturity of the SGB 2017-18 Series II, investors are advised to check their registered bank accounts for the credit of the redemption amount. The government will decide on future SGB issuances based on market conditions and borrowing costs. The last SGB issue was in February 2024, and the next tranche is yet to be announced.