RBI Sets Final Redemption Price for Gold Bonds
The Reserve Bank of India (RBI) has announced the final redemption price for the Sovereign Gold Bond (SGB) 2016-17 Series IV, which is set for redemption today, March 17, 2025. The final price has been established at Rs 8,634 per gram, reflecting a significant return for investors over the eight-year term. This announcement highlights the growing popularity of gold bonds as an investment alternative.
Final Redemption Price Details
The final redemption price of Rs 8,634 per gram is based on the average closing gold prices from March 11 to March 13, 2025. This price marks a substantial increase from the initial issue price of Rs 2,943 per gram, which included a discount for online applicants. Investors in the SGB 2016-17 Series IV have enjoyed a remarkable return of 193% over the eight-year period, not accounting for the interest earned.
In addition to capital gains, SGB holders have benefited from a fixed annual interest rate of 2.50%, paid semi-annually. This interest is an attractive feature for investors seeking regular income alongside capital appreciation. Furthermore, one of the key advantages of investing in SGBs is the exemption from capital gains tax if held until maturity, allowing investors to retain the full benefit of their investment growth.
Understanding Sovereign Gold Bonds
Sovereign Gold Bonds are government securities issued by the RBI on behalf of the Indian government. They are denominated in grams of gold and serve as an alternative to physical gold investments. These bonds not only provide a means to invest in gold but also offer periodic interest payments to investors.
Eligible investors include Indian residents, Hindu Undivided Families (HUFs), trusts, universities, and charitable institutions. Notably, individuals who change their residential status from resident to non-resident can continue to hold their SGBs until maturity or early redemption. The bonds are available for purchase through various authorized channels, including nationalized banks, scheduled private banks, and stock exchanges.
Redemption Process for Investors
As the maturity date approaches, investors will receive notifications regarding the redemption process. One month prior to maturity, the RBI will inform investors about the upcoming redemption. On the maturity date, the proceeds will be directly credited to the investorโs registered bank account. It is crucial for investors to ensure that their bank account details are up to date with their financial institution or the Stock Holding Corporation of India Ltd. (SHCIL) to facilitate a smooth redemption process.
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