Gold Bond Investors to Get 333% Returns on December 2017 Issue
In a significant development for investors, the Reserve Bank of India (RBI) has announced the final redemption price for Sovereign Gold Bonds (SGBs) issued in December 2017. The RBI has set the final redemption price at ₹12,801 for the SGBs under the 2017-18 Series-XI, which had an issue date of December 11, 2017. This price point is significantly higher than the issue price of ₹2,954 per unit, resulting in a staggering return of around 333% for investors who bought these bonds.
For those unfamiliar with SGBs, they are a type of investment instrument issued by the Government of India, allowing individuals to invest in gold without actually holding physical gold. The bonds are denominated in grams of gold and are issued by the RBI on behalf of the government. SGBs offer a unique opportunity for investors to diversify their portfolio and hedge against inflation, as the value of gold tends to appreciate over time.
The announcement of the final redemption price for the December 2017 issue is a testament to the success of the SGB program, which was launched in 2015 to reduce the demand for physical gold and encourage investors to opt for a more secure and transparent mode of gold investment. The program has been well-received by investors, with many opting for SGBs as a viable alternative to traditional gold investments such as gold coins, bars, and jewelry.
The 333% return on investment for the December 2017 issue is a significant windfall for investors, who will receive the final redemption price of ₹12,801 per unit. This return is a result of the appreciation in the value of gold over the past few years, as well as the interest earned on the investment. SGBs offer an annual interest rate of 2.5%, which is paid semi-annually, making them an attractive option for investors seeking regular income.
In addition to the final redemption price for the December 2017 issue, the RBI has also set the premature redemption price for the 2019-20 Series I SGBs, which had an issue date of June 11, 2019. The premature redemption price for these bonds has been set at the same level as the final redemption price for the December 2017 issue, at ₹12,801 per unit. This move is expected to provide liquidity to investors who may need to exit their investment before the maturity date.
The announcement of the final redemption price for the December 2017 issue is a welcome development for investors, who have been waiting for the RBI to announce the price. The significant return on investment is a testament to the potential of SGBs as a viable investment option, and is likely to attract more investors to the program.
For investors who are considering investing in SGBs, the announcement of the final redemption price for the December 2017 issue serves as a reminder of the potential benefits of investing in these bonds. With the value of gold expected to continue appreciating over time, SGBs offer a unique opportunity for investors to diversify their portfolio and hedge against inflation.
In conclusion, the announcement of the final redemption price for the December 2017 issue of SGBs is a significant development for investors, who will receive a return of around 333% on their investment. The success of the SGB program is a testament to the government’s efforts to encourage investors to opt for a more secure and transparent mode of gold investment. As the value of gold continues to appreciate over time, SGBs are likely to remain a popular investment option for those seeking to diversify their portfolio and hedge against inflation.
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