SGB 2021–22 Series VII Redemption at ₹14,167: Use the Right Cost Before Quoting the Return

Event: 30 October announcement; 2 November 2026 redemption · Verified and explained: 4 November 2026.

A redemption headline becomes a personal return only after you know what you actually paid. RBI fixed ₹14,167 per unit for the 2 November 2026 premature redemption of Sovereign Gold Bond 2021–22 Series VII. That is a dated price for a particular redemption event, not the guaranteed exit price of every gold bond or the current market quote for gold.

The RBI release identifies the original issue date as 2 November 2021. The redemption price uses the simple average of IBJA’s closing prices for 999-purity gold on 28, 29 and 30 October 2026. The option falls after five years on an interest-payment date, under the tranche’s terms. It is not the eight-year final maturity. [1]

The specific bond and price

The original nominal issue price was ₹4,761 per gram, confirmed in the government’s October 2021 release. The contemporaneous issue note records a ₹50 digital-subscription discount, making the qualifying online purchase price ₹4,711. Those prices differ from numbers repeated in some summaries, so they are checked here against the original documents. [2][3]

The capital appreciation, correctly calculated

For an original qualifying digital subscriber paying ₹4,711, the capital difference is ₹14,167 minus ₹4,711, or ₹9,456 per unit. Dividing that gain by ₹4,711 gives about 200.72% cumulative capital appreciation. Using the ₹4,761 nominal price instead gives ₹9,406, or about 197.56%. These calculations exclude coupons, tax and costs.

The difference illustrates why a single headline percentage is not universal. Someone who bought later on an exchange may have paid a different amount and held the bond for a different period. Their return must start from the actual trade cost and date. The original issue-to-redemption calculation cannot simply be copied into every holder’s portfolio report.

A five-year gain is not an annual return

The 200.72% figure is cumulative capital appreciation over the five-year issue-to-redemption interval. It does not mean the investment earned 200.72% each year. A simplified five-year capital-only compound annual growth rate is approximately 24.63%, calculated as the fifth root of ₹14,167 divided by ₹4,711, minus one.

That annualised number still leaves out the timing and amount of the interest receipts. For an investor-specific money-weighted return, use the actual dated purchase outflow, each coupon and the final redemption inflow. If the holder bought in the secondary market or reinvested coupons, their cash-flow record will differ. A precise XIRR needs those records, not an assumed issue-date purchase.

Coupon income and gold appreciation are separate streams

SGBs have an interest component under their terms as well as a gold-linked redemption value. The coupon is not recalculated as a percentage of every new gold price. Nor should a five-year total coupon percentage be casually added to a compound annual capital-growth rate; the time periods and reinvestment assumptions would be inconsistent.

A useful personal statement separates three lines: the cost of the bond, interest received during ownership and redemption proceeds. Then it explains the return methodology. This makes it easier to compare with another investment without hiding cash distributions or assuming that money received years earlier remained invested at a particular rate.

Premature redemption and an exchange sale are different exits

The RBI price applies to the specified redemption through the scheme process. A sale on the exchange uses the available bid, ask and trading depth, which may differ from that price. Eligibility, request windows and procedural requirements must be checked with the relevant receiving office or intermediary. Seeing the price announcement does not prove that a holder’s redemption request was lodged or accepted.

Because the 2 November date has passed, a holder reviewing this article on 4 November should check their actual transaction and bank records. Do not treat an old request window as still open. If no redemption occurred, the remaining bond position and future permitted exits must be assessed under the applicable terms and subsequent notices.

Do not carry an old tax summary into a new transaction

The original 2021 issue material is useful for the original price and terms, but it is not a current tax manual. Tax treatment can depend on the current law, the holder, the acquisition history and whether the exit is scheme redemption or a market sale. Interest and capital proceeds also require separate treatment. A headline return “before tax” should remain clearly labelled that way.

For a real transaction, verify the rules applicable on the exit date and the supporting records before calculating a tax-adjusted return. This article deliberately does not promise that every holder or every exit is tax-free. A correct price calculation and a correct tax calculation are related pieces of a report, but one does not substitute for the other.

The next decision is about the portfolio, not the past gain

If redemption proceeds have arrived, ask what job that money should now do. It may support a near-term goal, restore an emergency reserve or be reallocated under a broader asset-allocation plan. Automatically buying more of the recent winner can increase concentration precisely after a large price move.

• Reconcile the bond units and actual proceeds.
• Record coupons separately from capital appreciation.
• Use actual acquisition cost and dates for personal returns.
• Check current tax treatment for the exact exit route.
• Review the portfolio’s gold weight before reinvesting.
• Avoid assuming that the next five years repeat the last five.

The useful result of this redemption is a clear cash-flow record and a considered reinvestment decision. The impressive historical gain deserves accurate arithmetic, but the investor’s next allocation should be based on future needs and risk, rather than a percentage borrowed from another holder’s experience.

Questions readers ask

What was the 2 November redemption price for SGB 2021–22 Series VII?

RBI set ₹14,167 per unit, based on the simple average of IBJA’s 999-purity gold closing prices on 28–30 October 2026. This is the specified premature-redemption price, not a universal exchange quote.

What is the capital gain for an original digital subscriber?

Using the original ₹4,711 qualifying digital price, the capital difference is ₹9,456 per unit, or about 200.72% cumulatively over five years. This excludes coupons, taxes and costs; other holders must use their actual cost.

Is that 200.72% an annual return?

No. It is cumulative capital appreciation. The simplified five-year capital-only CAGR is about 24.63%; a personal money-weighted return also requires actual dated coupons, purchase cost and redemption proceeds.

Connect the news to your own holdings

Use MF Analyser Portfolio Analysis to review the schemes you actually own. Compare holdings dates, sector concentration and overlap before deciding whether this development changes your exposure. A headline is a starting question, not an instruction to trade.

Cover: AI-generated editorial illustration, not a photograph documenting this event. Hypothetical calculations are explicitly labelled. This article explains published information and arithmetic; it does not provide personalised investment, legal or trading advice.