Sovereign Gold Bonds Achieve Over 200% Returns Following RBI Announcement

Investors who purchased Sovereign Gold Bonds (SGB) in 2017 or 2018 are in for a pleasant surprise as the Reserve Bank of India (RBI) has announced a redemption price that exceeds 200% returns. The RBI revealed that the redemption price for the SGB 2017-18 Series-XIV and SGB 2018-19 Series-IV will be set at Rs 9,628 per unit. This announcement comes as the bonds, which have an eight-year tenure, allow for premature redemption after five years from their issuance date.

Redemption Price Calculation

The RBI’s announcement on June 30 detailed how the redemption price is determined. It is calculated as the simple average of the closing gold price of 999 purity over the three business days leading up to the redemption date. For this particular cycle, the relevant dates were June 26, 27, and 30. This method ensures that the redemption price reflects the current market value of gold, providing investors with a fair return on their investment.

Returns on SGB 2017-18 Series-XIV

Investors who bought into the SGB 2017-18 Series-XIV in January 2018 at a price of Rs 2,831 per gram are set to receive a remarkable return of nearly 240%. This significant appreciation highlights the benefits of investing in gold bonds, especially during periods of rising gold prices. The current redemption price of Rs 9,628 per unit underscores the bond’s strong performance over the years.

Returns on SGB 2018-19 Series-IV

Similarly, those who invested in the SGB 2018-19 Series-IV, issued in January 2019 at Rs 3,119 per gram, will see an increase of over 208%. If these investors choose to redeem their bonds prematurely, they will receive Rs 6,509 per unit. It is important to note that this amount does not include the fixed annual interest of 2.5%, which is paid semi-annually and credited directly to the investor’s bank account.

Process for Premature Redemption

Investors looking to redeem their SGBs prematurely must first identify the bond tranche based on the issue date to confirm eligibility. They should submit their redemption request before the specified deadline to ensure timely processing. The RBI will notify investors one month in advance of their SGBs’ maturity. On the maturity date, the proceeds will be directly credited to the registered bank account. Investors are advised to keep their personal details, such as bank account numbers and email addresses, updated with the issuing authority to avoid any issues during the redemption process.

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