SGB 2021-22 Series VII Premature Redemption (Image Source: Pixabay) Investors holding Sovereign Gold Bonds (SGBs) 2021-22 Series VII will get an opportunity to redeem their investments before maturity on November 2, 2026. The Reserve Bank of India (RBI) has announced a premature redemption price of Rs 14,167 per gram for this tranche, which was originally issued in November 2021. The announcement comes as the bonds complete five years from their date of issuance, making them eligible for early redemption under the applicable rules. Investors who purchased these bonds at the time of the original issue could potentially book substantial gains, given the appreciation in gold prices over the holding period. Besides the capital appreciation, SGB investors are also entitled to fixed interest payments. The RBI has scheduled November 2, 2026, as the premature redemption date for Sovereign Gold Bonds 2021-22 Series VII. The tranche was initially issued on November 2, 2021. As per the RBI's press release dated October 30, investors can exercise the premature redemption option after completing five years from the bond's issuance date, provided the redemption takes place on an interest payment date. The central bank stated: “Premature redemption of Gold Bond may be permitted after fifth year from the date of issue of such Gold Bond on the date on which interest is payable. Accordingly, the due date of premature redemption of the above tranche shall be on November 02, 2026.” Sovereign Gold Bonds are government securities issued by the RBI on behalf of the Government of India. Their value is denominated in grams of gold, allowing investors to benefit from movements in gold prices without purchasing or physically holding the metal. The RBI has set the premature redemption value at Rs 14,167 per unit, with each unit representing one gram of gold. The price is determined using the average closing rate of 999-purity gold over the three business days immediately preceding the redemption date. The India Bullion and Jewellers Association Ltd (IBJA) publishes the gold prices used for this calculation. Explaining the valuation methodology, the RBI said: “The redemption price for premature redemption due on November 02, 2026, shall be Rs 14,167/- (Rupees Fourteen Thousand One Hundred and Sixty-Seven Only) per unit of SGB based on the simple average of closing price of gold for the three business days i.e., October 28, October 29, and October 30, 2026.” Therefore, the redemption amount reflects the movement in gold prices over the holding period rather than the original issue price of the bonds. SGB 2021-22 Series VII: How Much Capital Gain Will Investors Make? The original issue price of SGB 2021-22 Series VII was Rs 4,765 per gram, according to the Ministry of Finance's release published through the Press Information Bureau (PIB) on October 23, 2021. However, investors who subscribed online and made payments through digital channels were offered a discount of Rs 50 per gram. This brought their effective purchase price down to Rs 4,715 per gram.