CapitalVia
CapitalVia Research Desk ·
Data story · 24 Oct 2026

Sovereign Gold Bond 2018-19 · Series II

₹31,460 in a 2018 gold bond came back as ₹1.5 lakh

A government gold bond issued in October 2018 reached its eight-year maturity on 23 October 2026. RBI fixed the payout at ₹14,425 a gram. Investors had paid ₹3,146.

Redemption price ÷ issue price, per gram
4.6×
₹3,146 in Oct 2018 → ₹14,425 in Oct 2026
Issue price
Oct 2018
₹3,146
Payout
Oct 2026
₹14,425

What 10 grams turned into

A buyer of 10 units at the ₹3,146 nominal price, held to maturity

Paid in Oct 2018₹31,460
Gold price gain (redemption ₹1,44,250 minus cost)₹1,12,790
Interest, 2.5% a year for 8 years₹6,292
Total received₹1,50,542
5%

The 2.5% interest, the part easiest to compare with an FD, was only about 5% of the total gain. The other 95% came from the price of gold.

Gold price: ₹1,12,790Interest: ₹6,292
Split of the ₹1,19,082 total gain on 10 grams

The terms, from RBI's own documents

8 yrs
Issued 23 Oct 2018, matured 23 Oct 2026
~21%
Yearly growth of the bond's gold price, compounded (before interest)
₹0
Capital-gains tax on the redemption gain for individuals
Taxable
The 2.5% interest, at your income-tax slab

Why it matters

Salaried savers

The coupon looked weak beside a bank fixed deposit. On this tranche, the coupon barely mattered: the gold price did nearly all the work, and the maturity gain was tax-free.

Founders

Cheap-looking money can be expensive. A 2.5% headline cost hid the real cost: repayment tied to an asset that rose 4.6× in rupees.

Business leaders

That is the government's side of this trade. For every ₹100 it raised per gram in 2018, it repaid ₹458, plus ₹20 of interest along the way.

Gold can fall as well as rise, and one eight-year window is not a forecast. This tranche happened to cover a strong run for gold.

Sources: RBI press release 2026-2027/1369, 22 Oct 2026 (final redemption price ₹14,425/gram, SGB 2018-19 Series II); RBI press release 2018-2019/874, 12 Oct 2018 (issue price ₹3,146/gram, ₹3,096 online); RBI circular IDMD.CDD.No.821/14.04.050/2018-19, 8 Oct 2018 (issue date, 2.50% fixed interest on nominal value, 8-year tenor, capital-gains exemption on redemption for individuals).

Estimates and our maths: No figure here is an estimate. The 4.6× multiple, ~21% yearly growth (₹3,146 to ₹14,425 over 8 years, compounded), the 10-gram example and the 95/5 split are CapitalVia calculations from RBI's published prices. Interest is 2.5% × ₹3,146 × 8 years, before tax. Online applicants paid ₹3,096, so their multiple was a little higher (4.66×); we use the ₹3,146 nominal price throughout.

A data explainer for general education. Not investment, tax or legal advice.

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