Gold bond investors to get 333% returns on December 2017 issue
In a welcome move for investors, the Reserve Bank of India (RBI) has announced that the final redemption price of ₹12,801 for Sovereign Gold Bonds under 2017-18 Series-XI with an issue date of December 11, 2017. This means that investors who bought the bonds at ₹2,954 per unit will get a return of around 333%. The news has sent a wave of excitement among investors who had put their money in these bonds, hoping to reap benefits from the yellow metal.
The Sovereign Gold Bond (SGB) scheme was launched by the Government of India in 2015, with the objective of reducing the demand for physical gold and shifting a part of the domestic savings, used for the purchase of gold, into financial savings. The scheme allows investors to buy gold in a non-physical form, with the added benefit of earning interest on their investment. The bonds are denominated in grams of gold, and the investor gets the redemption price in cash, at the time of maturity.
The 2017-18 Series-XI SGB was issued on December 11, 2017, with a face value of ₹2,954 per unit, which is equivalent to the price of one gram of gold at that time. The bond has a tenure of eight years, with an option to exit after the fifth year. The interest on the bond is paid at a fixed rate of 2.50% per annum, payable semi-annually.
The final redemption price of ₹12,801 per unit is a testament to the fact that gold has been a steady performer over the years, despite some fluctuations in the market. The price of gold has increased significantly since the issue date of the bond, driven by a combination of factors such as geopolitical tensions, economic uncertainty, and a decline in the value of the US dollar.
The returns on the SGB are even more impressive when compared to other investment options available in the market. With a return of around 333%, the SGB has outperformed most other asset classes, including stocks, mutual funds, and fixed deposits. This is a clear indication that gold can be a lucrative investment option, especially for those who have a long-term perspective.
In addition to the final redemption price, the RBI has also set the same price for premature redemption of 2019-20 Series I with an issue date of June 11, 2019. This means that investors who had bought the bonds in 2019 can also exit their investment at the same price, if they so desire.
The SGB scheme has been a huge success, with investors lapping up the bonds in large numbers. The scheme has helped to reduce the demand for physical gold, which has had a positive impact on the country’s current account deficit. The scheme has also helped to channelize household savings into financial savings, which is a key objective of the government.
The news of the final redemption price of the SGB has sent a positive signal to the market, with investors hoping that the price of gold will continue to rise in the future. While there are no guarantees in the market, the fact that gold has been a steady performer over the years suggests that it can be a good investment option for those who are looking to diversify their portfolio.
In conclusion, the announcement of the final redemption price of the SGB is a welcome move for investors, who will get a return of around 333% on their investment. The news is a testament to the fact that gold can be a lucrative investment option, especially for those who have a long-term perspective. With the SGB scheme continuing to be a popular investment option, it is likely that the demand for gold will continue to rise in the future.
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