{"id":14605,"date":"2026-07-06T13:04:21","date_gmt":"2026-07-06T07:34:21","guid":{"rendered":"https:\/\/goldenpi.com\/blog\/?p=14605"},"modified":"2026-07-10T14:02:41","modified_gmt":"2026-07-10T08:32:41","slug":"how-is-the-sgb-redemption-price-calculated-complete-formula-explained","status":"publish","type":"post","link":"https:\/\/goldenpi.com\/blog\/bond-news\/how-is-the-sgb-redemption-price-calculated-complete-formula-explained\/","title":{"rendered":"How is the SGB Redemption Price Calculated? Complete Formula Explained"},"content":{"rendered":"<div class=\"gpi-custom-widget-box\" style=\"border-left-color: #0066cc; background-color: #f0f7ff;\">\n<div class=\"gpi-custom-widget-title\" style=\"color: #0066cc;\">\ud83d\udcdd Quick Summary:<\/div>\n<h2 class=\"gpi-custom-widget-h2-content\"><span class=\"ez-toc-section\" id=\"The_Sovereign_Gold_Bond_SGB_redemption_price_is_calculated_using_the_simple_average_of_the_closing_gold_price_for_999-purity_gold_over_the_previous_three_business_days_These_rates_are_officially_published_by_the_India_Bullion_and_Jewellers_Association_Limited_IBJA\"><\/span>The <span class=\"\" data-sfc-cp=\"\" data-sfc-root=\"ep\" data-sfc-cb=\"\" data-complete=\"true\" data-sfc-inited=\"2\" data-copy-service-computed-style=\"font-family: &quot;Google Sans&quot;, Arial, sans-serif; font-size: 16px; font-weight: 400; margin: 0px; text-decoration: none; border-bottom: 0px rgb(10, 10, 10);\">Sovereign Gold Bond (SGB)<!--TgQPHd||[[&quot;https:\/\/www.rbi.org.in\/commonman\/English\/Scripts\/FAQs.aspx?Id\\u003d1658&quot;,null,null,[null,null,null,null,null,null,null,null,null,null,null,null,null,null,null,[{&quot;1218&quot;:[16]}]],16,null,&quot;Sovereign Gold Bond (SGB) - Reserve Bank of India&quot;,&quot;On maturity, the Gold Bonds shall be redeemed in Indian Rupees and the redemption price shall be based on simple average of closing price of gold of 999 purity of previous 3 business days from the date of repayment, published by the India Bullion and Jewelers Association Limited. 22. How will I get the redemption amount? Both interest and redemption proceeds will be credited to the bank account furnished by the customer at the time of buying the bond. 23. What are the procedures involved during redemption? The investor will be advised one month before maturity regarding the ensuing maturity of the bond. On the date of maturity, the maturity proceeds will be credited to the bank account as per the details on ...&quot;,null,&quot;RBI&quot;,&quot;https:\/\/encrypted-tbn2.gstatic.com\/faviconV2?url\\u003dhttps:\/\/www.rbi.org.in\\u0026client\\u003dAIM\\u0026size\\u003d128\\u0026type\\u003dFAVICON\\u0026fallback_opts\\u003dTYPE,SIZE,URL&quot;,[[1783507624699903,104385904,3624067986],null,null,null,null,[[2,0,0,6]]],null,&quot;d1050733-c002-4e1f-aca8-8f5742a5cc84&quot;]]--><\/span> redemption price is calculated using the simple average of the closing gold price for 999-purity gold over the previous three business days. These rates are officially published by the <span class=\"T286Pc\" data-sfc-cp=\"\" data-sfc-root=\"ep\" data-sfc-cb=\"\" data-complete=\"true\" data-copy-service-computed-style=\"font-family: &quot;Google Sans&quot;, Arial, sans-serif; font-size: 16px; font-weight: 400; margin: 0px; text-decoration: none; border-bottom: 0px rgb(10, 10, 10);\">India Bullion and Jewellers Association Limited (IBJA)<\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<\/div>\n\n\n<p>The SGB redemption price is determined by the Reserve Bank of India (RBI) using the simple average of the closing price of 999 purity gold for the <strong>preceding three business days<\/strong>. This price is published by the India Bullion and Jewellers Association (IBJA)<\/p><div id=\"ez-toc-container\" class=\"ez-toc-v2_0_79_2 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/goldenpi.com\/blog\/bond-news\/how-is-the-sgb-redemption-price-calculated-complete-formula-explained\/#The_Sovereign_Gold_Bond_SGB_redemption_price_is_calculated_using_the_simple_average_of_the_closing_gold_price_for_999-purity_gold_over_the_previous_three_business_days_These_rates_are_officially_published_by_the_India_Bullion_and_Jewellers_Association_Limited_IBJA\" >The Sovereign Gold Bond (SGB) redemption price is calculated using the simple average of the closing gold price for 999-purity gold over the previous three business days. These rates are officially published by the India Bullion and Jewellers Association Limited (IBJA)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/goldenpi.com\/blog\/bond-news\/how-is-the-sgb-redemption-price-calculated-complete-formula-explained\/#The_Redemption_Price_Formula\" >The Redemption Price Formula<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/goldenpi.com\/blog\/bond-news\/how-is-the-sgb-redemption-price-calculated-complete-formula-explained\/#Core_Calculation_Details\" >Core Calculation Details:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/goldenpi.com\/blog\/bond-news\/how-is-the-sgb-redemption-price-calculated-complete-formula-explained\/#Key_Points_to_Remember\" >Key Points to Remember<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/goldenpi.com\/blog\/bond-news\/how-is-the-sgb-redemption-price-calculated-complete-formula-explained\/#Why_the_3-Day_Average_Matters\" >Why the 3-Day Average Matters<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/goldenpi.com\/blog\/bond-news\/how-is-the-sgb-redemption-price-calculated-complete-formula-explained\/#How_the_Process_Works\" >How the Process Works:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/goldenpi.com\/blog\/bond-news\/how-is-the-sgb-redemption-price-calculated-complete-formula-explained\/#Ready_to_Invest\" >Ready to Invest?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/goldenpi.com\/blog\/bond-news\/how-is-the-sgb-redemption-price-calculated-complete-formula-explained\/#Disclaimer\" >Disclaimer:&nbsp;<\/a><\/li><\/ul><\/nav><\/div>\n\n\n\n\n<p>When <a href=\"https:\/\/goldenpi.com\/sovereign-gold-bond\">Sovereign Gold Bonds<\/a> are redeemed, the price is tied to the current market value of gold, not what you originally paid. So, at maturity or if you redeem early, your returns will reflect the going rate for gold. This is quite relevant right now, since a bunch of SGB tranches from 2020 and 2021 are hitting their 5-year mark, which means they can be redeemed early through 2026.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"The_Redemption_Price_Formula\"><\/span><strong>The Redemption Price Formula<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The redemption price is based on the average closing price of 999-purity gold for the three business days leading up to the redemption date. This price is published by the India Bullion and Jewellers Association, or IBJA.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Formula of SGB Redemption:<\/strong><\/h3>\n\n\n\n<p>Redemption Price = (Closing Price Day 1 + Closing Price Day 2 + Closing Price Day 3) \u00f7 3<\/p>\n\n\n\n<p>For example, if the 999-purity gold closing prices on the three relevant days were \u20b97,200, \u20b97,220, and \u20b97,180 per gram, the redemption price would be (7,200 + 7,220 + 7,180) \u00f7 3 = \u20b97,200 per gram<\/p>\n\n\n\n<p>This average is then applied to the number of grams of gold you hold in bond form to calculate your total redemption amount.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Core_Calculation_Details\"><\/span><strong>Core Calculation Details:<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Timeframe:<\/strong> The average is calculated over the three working days immediately preceding the redemption or maturity date.<\/li>\n\n\n\n<li><strong>Gold Purity:<\/strong> The valuation strictly applies to 999-purity (24-karat) gold.<\/li>\n\n\n\n<li><strong>Published Rates:<\/strong> The RBI uses the exact rates officially declared by the IBJA.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Key_Points_to_Remember\"><\/span><strong>Key Points to Remember<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Currency and unit<\/strong>: The price is always calculated in Indian Rupees per gram of gold.<\/li>\n\n\n\n<li><strong>Redemption window<\/strong>: Investors can request early redemption after the 5th year (on interest payment dates), while full maturity occurs at 8 years.<\/li>\n\n\n\n<li><strong>2026 relevance<\/strong>: Since SGBs carry an 8-year tenure with an exit option starting from year 5, several tranches from 2020\u201321 are entering their early redemption windows this year, making it a good time for eligible investors to review their holdings.<\/li>\n\n\n\n<li><strong>Notification<\/strong>: The RBI publishes the exact redemption price on its website ahead of the redemption date, so investors don&#8217;t need to calculate it manually.<\/li>\n\n\n\n<li><strong>Tax treatment<\/strong>: Capital gains on <a href=\"https:\/\/goldenpi.com\/blog\/bond-news\/sgb-maturity-guide-tax-rules-redemption-next-steps\/\" type=\"post\" id=\"14473\">SGBs are tax-exempt<\/a> if held until maturity, making the redemption price directly relevant to your net returns.<\/li>\n\n\n\n<li><strong>No price is fixed in advance<\/strong>: Since it depends on the 3-day average close to the redemption date, the exact amount is only known shortly before payout.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Why_the_3-Day_Average_Matters\"><\/span><strong>Why the 3-Day Average Matters<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Opting for an average closing price, as opposed to a single day&#8217;s, lessens the influence of short-term fluctuations in gold prices, resulting in a fairer and steadier redemption value for investors.<\/p>\n\n\n\n<p>Given that several tranches are set to qualify for early redemption in 2026, understanding this calculation is particularly beneficial for investors currently facing the choice of exiting ahead of schedule or holding until maturity.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Related Bonds News:<\/h3>\n\n\n<ul class=\"wp-block-latest-posts__list is-grid columns-3 wp-block-latest-posts\"><li><div class=\"wp-block-latest-posts__featured-image\"><img decoding=\"async\" width=\"1024\" height=\"576\" src=\"https:\/\/d2zny4996dl67j.cloudfront.net\/blogs\/wp-content\/uploads\/2026\/07\/23163246\/SBI-TO-ISSUE-200-MILLION-1024x576.jpg\" class=\"attachment-large size-large wp-post-image\" alt=\"SBI TO ISSUE $200 MILLION\" style=\"\" srcset=\"https:\/\/d2zny4996dl67j.cloudfront.net\/blogs\/wp-content\/uploads\/2026\/07\/23163246\/SBI-TO-ISSUE-200-MILLION-1024x576.jpg 1024w, https:\/\/d2zny4996dl67j.cloudfront.net\/blogs\/wp-content\/uploads\/2026\/07\/23163246\/SBI-TO-ISSUE-200-MILLION-300x169.jpg 300w, https:\/\/d2zny4996dl67j.cloudfront.net\/blogs\/wp-content\/uploads\/2026\/07\/23163246\/SBI-TO-ISSUE-200-MILLION-768x432.jpg 768w, https:\/\/d2zny4996dl67j.cloudfront.net\/blogs\/wp-content\/uploads\/2026\/07\/23163246\/SBI-TO-ISSUE-200-MILLION-1536x864.jpg 1536w, https:\/\/d2zny4996dl67j.cloudfront.net\/blogs\/wp-content\/uploads\/2026\/07\/23163246\/SBI-TO-ISSUE-200-MILLION.jpg 1600w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><\/div><a class=\"wp-block-latest-posts__post-title\" href=\"https:\/\/goldenpi.com\/blog\/bond-news\/sbi-to-issue-200-million-offshore-bonds-via-london-branch\/\">SBI to Issue $200 Million Offshore Bonds via London Branch<\/a><\/li>\n<li><div class=\"wp-block-latest-posts__featured-image\"><img decoding=\"async\" width=\"1024\" height=\"576\" src=\"https:\/\/d2zny4996dl67j.cloudfront.net\/blogs\/wp-content\/uploads\/2026\/07\/23184019\/Temple-Bonds-1024x576.jpg\" class=\"attachment-large size-large wp-post-image\" alt=\"Temple Bonds\" style=\"\" srcset=\"https:\/\/d2zny4996dl67j.cloudfront.net\/blogs\/wp-content\/uploads\/2026\/07\/23184019\/Temple-Bonds-1024x576.jpg 1024w, https:\/\/d2zny4996dl67j.cloudfront.net\/blogs\/wp-content\/uploads\/2026\/07\/23184019\/Temple-Bonds-300x169.jpg 300w, https:\/\/d2zny4996dl67j.cloudfront.net\/blogs\/wp-content\/uploads\/2026\/07\/23184019\/Temple-Bonds-768x432.jpg 768w, https:\/\/d2zny4996dl67j.cloudfront.net\/blogs\/wp-content\/uploads\/2026\/07\/23184019\/Temple-Bonds-1536x864.jpg 1536w, https:\/\/d2zny4996dl67j.cloudfront.net\/blogs\/wp-content\/uploads\/2026\/07\/23184019\/Temple-Bonds.jpg 1600w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><\/div><a class=\"wp-block-latest-posts__post-title\" href=\"https:\/\/goldenpi.com\/blog\/bond-news\/indias-first-temple-bonds-launched-for-%e2%82%b91100-crore-ujjain-project\/\">India&#8217;s First Temple Bonds Launched for \u20b91,100 Crore Ujjain Project<\/a><\/li>\n<li><div class=\"wp-block-latest-posts__featured-image\"><img decoding=\"async\" width=\"1024\" height=\"576\" src=\"https:\/\/d2zny4996dl67j.cloudfront.net\/blogs\/wp-content\/uploads\/2026\/07\/22182209\/Why-Two-AA-Rated-Bonds-1-1024x576.jpg\" class=\"attachment-large size-large wp-post-image\" alt=\"Why Two AA-Rated Bonds (1)\" style=\"\" srcset=\"https:\/\/d2zny4996dl67j.cloudfront.net\/blogs\/wp-content\/uploads\/2026\/07\/22182209\/Why-Two-AA-Rated-Bonds-1-1024x576.jpg 1024w, https:\/\/d2zny4996dl67j.cloudfront.net\/blogs\/wp-content\/uploads\/2026\/07\/22182209\/Why-Two-AA-Rated-Bonds-1-300x169.jpg 300w, https:\/\/d2zny4996dl67j.cloudfront.net\/blogs\/wp-content\/uploads\/2026\/07\/22182209\/Why-Two-AA-Rated-Bonds-1-768x432.jpg 768w, https:\/\/d2zny4996dl67j.cloudfront.net\/blogs\/wp-content\/uploads\/2026\/07\/22182209\/Why-Two-AA-Rated-Bonds-1-1536x864.jpg 1536w, https:\/\/d2zny4996dl67j.cloudfront.net\/blogs\/wp-content\/uploads\/2026\/07\/22182209\/Why-Two-AA-Rated-Bonds-1.jpg 1600w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><\/div><a class=\"wp-block-latest-posts__post-title\" href=\"https:\/\/goldenpi.com\/blog\/bond-news\/why-two-aa-rated-bonds-can-have-very-different-risk-profiles\/\">Why Two AA-Rated Bonds Can Have Very Different Risk Profiles<\/a><\/li>\n<\/ul>\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"How_the_Process_Works\"><\/span><strong>How the Process Works:<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ol class=\"wp-block-list\">\n<li><strong>Maturity:<\/strong> When an SGB reaches its full 8-year tenure, it is redeemed at this calculated average price.<\/li>\n\n\n\n<li><strong>Premature Exit:<\/strong> After the first 5 years, investors are permitted to exit early, but only on the specific dates when interest becomes payable. For these early exits, the RBI calculates the price using the same 3-day IBJA average<\/li>\n<\/ol>\n\n\n<!-- wp:heading -->\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Ready_to_Invest\"><\/span><strong>Ready to Invest?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<!-- \/wp:heading -->\n\n<!-- wp:paragraph -->\n<p>Visit&nbsp;<a href=\"https:\/\/goldenpi.com\/\">GoldenPi&nbsp;<\/a>to explore current bond options. Compare yields, ratings, and tenures in one place and invest online with as little as \u20b910,000.<\/p>\n<!-- \/wp:paragraph -->\n\n<!-- wp:heading -->\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Disclaimer\"><\/span><strong>Disclaimer:<\/strong>&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<!-- \/wp:heading -->\n\n<!-- wp:paragraph -->\n<p>Fixed returns do not constitute guaranteed or assured returns. Investments in corporate debt securities and municipal debt securities\/securitized debt instruments are subject to credit risks, market risks, and default risks, including delay and\/or default in payment. Read all the offer-related documents carefully. This blog\/article should not be construed as financial advice or as an offer or recommendation to buy or sell any security or any products\/services of\/on GoldenPi or any product\/services of its third-party client(s). For a detailed calculation of YTM, visit our website.&nbsp;<a href=\"https:\/\/delivery.goldenpi.com\/XPRBSN?id=162365=ch0GCFVXBVBUH1QDUlZXUlgBVgNSUwJVWgQGDFJQAVsEUwRfBldSBFVUAglRBFJSAA0ZBgxfQFBbERxBFSNTV10FU1cTDBgFDg5OAFIKVVFQBlZTVwQBBgFSAg0aC0BMQRIMFkwBUwoIFVdDHBwCCw1QAAsTWBpSVwgebDYxdmt\/Xl9dHxMF&amp;fl=WRVCSRBfGUkETltfVwNLAxVbCQwNWhpYVkpFGwMOBRcEWQMNUEoHSQJaV1BQAQQHTAZXA1IcAAMOBBxWB1IMFQUEVQxXXAEFBVQEUkpTVlMCUFEHU1JVAwhUAFECAQZaVFEADVAAVQBXVFRUUw==\" target=\"_blank\" rel=\"noreferrer noopener\">T&amp;C\u2019s Apply<\/a>.<\/p>\n<!-- \/wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p><\/p>\n<!-- \/wp:paragraph --><style data-type=\"vc_shortcodes-custom-css\"><\/style>\n\n\n\n<p><strong>Explore Bonds &#8211;<\/strong> <a href=\"https:\/\/goldenpi.com\/collections\/high-yield-bonds\">High Yield Bonds <\/a>| <a href=\"https:\/\/goldenpi.com\/corporate-bonds\">Corporate Bonds<\/a> | <a href=\"https:\/\/goldenpi.com\/collections\/tax-free-bonds\">Tax Free Bonds<\/a>| <a href=\"https:\/\/goldenpi.com\/\">Buy Bond Platform<\/a><\/p>\n\n\n\n<script type=\"application\/ld+json\">\n[\n  {\n    \"@context\": \"https:\/\/schema.org\",\n    \"@type\": \"NewsArticle\",\n    \"@id\": \"https:\/\/goldenpi.com\/blog\/bond-news\/how-is-the-sgb-redemption-price-calculated-complete-formula-explained\/#article\",\n    \"isPartOf\": {\n      \"@id\": \"https:\/\/goldenpi.com\/blog\/bond-news\/how-is-the-sgb-redemption-price-calculated-complete-formula-explained\/\"\n    },\n    \"headline\": \"How is the SGB Redemption Price Calculated? 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