Sovereign Gold Bonds Generate Significant Returns, RBI Confirms

The Reserve Bank of India (RBI) has announced promising news for investors who purchased Sovereign Gold Bonds (SGBs) in 2017 and 2018. The redemption price for two specific tranches, due for premature redemption on July 1, has been set at Rs 9,628 per unit. This represents a remarkable return of over 200% for investors, making it an opportune moment for those looking to cash in on their investments.

Details of the Redemption Price

The RBI’s announcement, made on June 30, outlines the redemption price for the SGB 2017-18 Series-XIV and SGB 2018-19 Series-IV. The redemption price is determined based on the simple average of the closing gold price of 999 purity over the three business days preceding the redemption date. For this cycle, the relevant dates were June 26, 27, and 30, as reported by the India Bullion and Jewellers Association Ltd (IBJA). Investors can expect to receive Rs 9,628 per unit for their bonds, which is a significant increase from their initial investment.

Investment Returns for Different Series

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 enjoy an impressive return of nearly 240%. Meanwhile, those who invested in the SGB 2018-19 Series-IV, issued in January 2019 at Rs 3,119 per gram, will see a return exceeding 208%. If these investors choose to redeem their bonds prematurely, they would receive Rs 6,509 per unit. It is important to note that these figures do not include the fixed annual interest of 2.5% that the bonds offer.

Interest Payments and Redemption Process

The Sovereign Gold Bonds carry an interest rate of 2.5% per annum, which is paid semi-annually. This interest is credited directly to the investor’s bank account and is in addition to the capital appreciation from the bonds. The final interest payout is made alongside the principal amount upon maturity or redemption. For those looking to redeem their bonds prematurely, it is crucial to identify the bond tranche by checking the issue date to determine eligibility. Investors must submit their redemption requests before the specified deadline to ensure timely processing.

Updating Personal Information

As the maturity date approaches, investors will receive notifications one month in advance regarding their SGBs. On the maturity date, the proceeds will be credited directly to the bank account registered with the issuing authority. It is essential for investors to keep their personal details, such as bank account numbers and email addresses, updated with the bank, SHCIL, or post office to avoid any issues during the redemption process. This proactive approach will help ensure a smooth transaction when the time comes to redeem their investments.

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