Gold Bond Investors to Get 333% Returns on December 2017 Issue
In a significant development, the Reserve Bank of India (RBI) has announced the final redemption price for Sovereign Gold Bonds (SGBs) issued in December 2017. According to the RBI, the final redemption price for SGBs under the 2017-18 Series-XI, which was issued on December 11, 2017, has been set at ₹12,801 per unit. This announcement has brought cheer to investors who had invested in these bonds, as they are set to receive a staggering return of around 333% on their investment.
To put this into perspective, investors who had bought the SGBs at ₹2,954 per unit in December 2017 will now receive ₹12,801 per unit, resulting in a massive return of 333% over a period of approximately 6 years. This is a significant windfall for investors who had invested in these bonds, and it highlights the potential of gold as a long-term investment option.
The RBI has also announced that the same price of ₹12,801 per unit will apply to premature redemption of SGBs under the 2019-20 Series I, which was issued on June 11, 2019. This means that investors who had invested in these bonds and are looking to redeem them prematurely will also receive the same price.
The SGB scheme was launched by the Government of India in 2015, with the objective of reducing the demand for physical gold and encouraging investors to invest in gold in a non-physical form. The scheme allows investors to buy gold in the form of bonds, which are denominated in grams of gold. The bonds have a tenure of 8 years, with an option to exit after 5 years.
The SGB scheme has been highly successful, with investors flocking to invest in these bonds due to their attractive returns and low risk. The scheme has also helped to reduce the demand for physical gold, which has had a positive impact on the country’s trade deficit.
The announcement of the final redemption price for SGBs has significant implications for investors. For one, it highlights the potential of gold as a long-term investment option. Gold has traditionally been seen as a safe-haven asset, and its prices tend to appreciate over time. The SGB scheme provides investors with an opportunity to invest in gold without having to physically hold it, which can be a challenge due to storage and security concerns.
The high returns on SGBs also underscore the importance of investing in assets that are not correlated with the stock market. While equity markets can be volatile, gold has traditionally been a hedge against market volatility. By investing in SGBs, investors can diversify their portfolios and reduce their risk.
Furthermore, the SGB scheme has also helped to promote financial inclusion. The scheme allows investors to buy gold in small quantities, which makes it accessible to a wider range of investors. This has helped to promote financial inclusion, as investors who may not have been able to invest in physical gold due to storage and security concerns can now invest in SGBs.
In conclusion, the announcement of the final redemption price for SGBs is a significant development for investors. The high returns on SGBs highlight the potential of gold as a long-term investment option, and the scheme has helped to promote financial inclusion. Investors who had invested in these bonds are set to receive a staggering return of around 333%, which is a testament to the success of the SGB scheme.
As the Indian economy continues to grow, the demand for gold is likely to remain high. The SGB scheme provides investors with an opportunity to invest in gold in a non-physical form, which can help to reduce the demand for physical gold and promote financial inclusion. With the RBI continuing to promote the SGB scheme, it is likely that we will see more investors flocking to invest in these bonds in the future.
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