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 fixed at ₹12,801 per unit. This means that investors who purchased these bonds at the issue price of ₹2,954 per unit will receive a staggering return of around 333%.
The SGB scheme was introduced by the Government of India in 2015 to reduce the demand for physical gold and to provide an alternative investment option for investors. The scheme allows investors to purchase gold in a non-physical form, with the added benefit of earning interest on their investment. The bonds are denominated in units of one gram of gold and are issued by the RBI on behalf of the Government of India.
For investors who purchased the SGBs in December 2017, the returns are expected to be substantial. With the final redemption price fixed at ₹12,801 per unit, investors will receive a return of around 333% over the eight-year period. This is a significant return, especially considering the relatively low risk associated with investing in SGBs.
In addition to the final redemption price for the December 2017 issue, the RBI has also set the price for premature redemption of SGBs issued in June 2019. The premature redemption price for the 2019-20 Series I, which was issued on June 11, 2019, has been fixed at the same price as the December 2017 issue, i.e., ₹12,801 per unit. This means that investors who purchased these bonds and wish to redeem them prematurely will also receive the same price as those who held onto their investments until maturity.
The high returns on SGBs can be attributed to the significant increase in gold prices over the past few years. Gold prices have been on an upward trend, driven by a combination of factors, including economic uncertainty, inflation, and a weakened US dollar. As a result, the value of SGBs has also increased, providing investors with substantial returns on their investments.
For investors who are considering purchasing SGBs, the current price of ₹12,801 per unit may seem high. However, it is essential to keep in mind that the price of SGBs is linked to the price of gold, and investors can expect to receive returns in line with the performance of gold prices. Additionally, SGBs offer a number of benefits, including a fixed interest rate of 2.5% per annum, which is paid semi-annually, and a tax-free return on investment.
In conclusion, the announcement of the final redemption price for SGBs issued in December 2017 is a significant development for investors who purchased these bonds. With returns of around 333%, investors can expect to receive substantial gains on their investments. The SGB scheme has proven to be a successful initiative, providing investors with a low-risk investment option that is linked to the performance of gold prices. As the price of gold continues to trend upwards, investors can expect to receive attractive returns on their SGB investments.
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