Gold Bond Investors to Get 333% Returns on December 2017 Issue
In a significant development, the Reserve Bank of India (RBI) has announced that the final redemption price of ₹12,801 for Sovereign Gold Bonds under the 2017-18 Series-XI, which was issued on December 11, 2017. This means that investors who bought the bonds at ₹2,954 per unit will get a return of around 333%. This is a substantial return on investment, and it highlights the potential of sovereign gold bonds as a lucrative investment option.
The Sovereign Gold Bond Scheme was introduced 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 are issued by the RBI on behalf of the Government of India and are available for purchase by resident individuals, Hindu Undivided Families (HUFs), trusts, universities, and charitable institutions.
The 2017-18 Series-XI bonds were issued at a price of ₹2,954 per unit, which is equivalent to the price of one gram of gold at the time of issue. The bonds have a tenure of eight years, with an option to exit after the fifth year. The interest on the bonds is paid at a fixed rate of 2.50% per annum, and the principal amount is repayable at the end of the tenure.
The final redemption price of ₹12,801 per unit is a significant increase from the issue price of ₹2,954 per unit. This means that investors who bought the bonds at the issue price will get a return of around 333%, which is a substantial return on investment. The high return is due to the appreciation in the price of gold over the past eight years, which has increased significantly.
In addition to the final redemption price, the RBI has also set the same price for premature redemption of 2019-20 Series I bonds, which were issued on June 11, 2019. This means that investors who bought these bonds can also redeem them at the same price of ₹12,801 per unit, which is a significant increase from the issue price.
The high return on sovereign gold bonds is a testament to the potential of these bonds as a lucrative investment option. The bonds offer a unique combination of capital appreciation and regular income, making them an attractive option for investors who want to diversify their portfolio. The bonds are also exempt from capital gains tax, which makes them an even more attractive option for investors.
The announcement of the final redemption price is also significant because it highlights the importance of investing in gold as a hedge against inflation and market volatility. Gold has traditionally been a safe-haven asset, and its price tends to appreciate during times of economic uncertainty. The high return on sovereign gold bonds is a reflection of the appreciation in the price of gold over the past eight years, which has increased significantly.
In conclusion, the announcement of the final redemption price of ₹12,801 per unit for Sovereign Gold Bonds under the 2017-18 Series-XI is a significant development for investors who bought these bonds. The high return of around 333% is a testament to the potential of these bonds as a lucrative investment option. The bonds offer a unique combination of capital appreciation and regular income, making them an attractive option for investors who want to diversify their portfolio. As the price of gold continues to appreciate, sovereign gold bonds are likely to remain a popular investment option for investors who want to hedge against inflation and market volatility.
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