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. The announcement has brought cheer to investors who had invested in these bonds, as they are set to receive a whopping return of around 333%. In this blog post, we will delve into the details of the announcement and what it means for investors.
The RBI has announced that the final redemption price of ₹12,801 will be applicable for SGBs under the 2017-18 Series-XI, which were issued on December 11, 2017. This means that investors who had bought these bonds at ₹2,954 per unit will receive a return of approximately 333% on their investment. To put this into perspective, an investment of ₹1 lakh in these bonds would have grown to around ₹4.33 lakhs, resulting in a profit of ₹3.33 lakhs.
The SGBs were introduced by the government as a way to reduce the demand for physical gold and to encourage investors to invest in gold in a non-physical form. The bonds are denominated in grams of gold and are issued by the RBI on behalf of the government. The returns on these bonds are linked to the price of gold, and investors receive the returns in the form of interest and capital appreciation.
The announcement by the RBI has also set the same price for premature redemption of SGBs under the 2019-20 Series I, which were issued on June 11, 2019. This means that investors who had invested in these bonds can also expect to receive a significant return on their investment if they choose to redeem their bonds prematurely.
The high returns on SGBs can be attributed to the significant increase in the price of gold over the past few years. Gold prices have been on an upward trend, driven by factors such as geopolitical tensions, economic uncertainty, and a decline in interest rates. As a result, the value of the SGBs has also increased, resulting in high returns for investors.
The announcement by the RBI is a testament to the potential of SGBs as a lucrative investment option. Investors who had invested in these bonds have been rewarded with high returns, and the announcement is likely to attract more investors to this asset class. The SGBs offer a unique combination of returns and safety, as they are backed by the government and are denominated in grams of gold.
In addition to the high returns, SGBs also offer other benefits to investors. They are exempt from capital gains tax, and the interest earned on these bonds is also exempt from tax. Furthermore, SGBs can be used as collateral for loans, and they can also be gifted to others.
The RBI’s announcement has significant implications for investors who had invested in SGBs. It highlights the potential of these bonds as a long-term investment option and demonstrates the importance of holding onto investments for the long term. The high returns on SGBs are a result of the significant increase in the price of gold over the past few years, and investors who had invested in these bonds have been rewarded for their patience.
In conclusion, the RBI’s announcement of the final redemption price for SGBs issued in December 2017 is a significant development for investors. The high returns on these bonds demonstrate the potential of SGBs as a lucrative investment option and are likely to attract more investors to this asset class. Investors who had invested in these bonds have been rewarded with high returns, and the announcement is a testament to the importance of holding onto investments for the long term.
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