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 of ₹12,801 for Sovereign Gold Bonds (SGBs) under the 2017-18 Series-XI, which was issued on December 11, 2017. This news has sent a wave of excitement among investors who had invested in these bonds, as they are set to receive a staggering return of around 333% on their investment. In this blog post, we will delve into the details of this announcement and what it means for investors.
To understand the significance of this announcement, let’s first take a look at the basics of Sovereign Gold Bonds. SGBs are a type of gold-denominated bond issued by the RBI on behalf of the Government of India. They were introduced in 2015 as a way to reduce the demand for physical gold and to provide investors with a more secure and convenient way to invest in gold. SGBs are denominated in grams of gold and are issued in multiples of one gram.
The 2017-18 Series-XI SGBs were issued on December 11, 2017, at a price of ₹2,954 per unit. At that time, the price of gold was around ₹26,000 per 10 grams. Since then, the price of gold has fluctuated, but the RBI has ensured that the returns on SGBs are linked to the market price of gold. As a result, investors who bought the bonds at ₹2,954 per unit will now receive ₹12,801 per unit, which translates to a return of around 333%.
This is a significant windfall for investors, especially considering the fact that the bonds were issued just five years ago. The returns on SGBs are tax-free, which makes them an attractive option for investors looking to diversify their portfolios. Additionally, SGBs are backed by the government, which ensures that investors receive their returns without any risk of default.
The RBI has also set the same price of ₹12,801 for premature redemption of 2019-20 Series I SGBs, which were issued on June 11, 2019. This means that investors who had invested in these bonds can now redeem them at the same price, which is significantly higher than the issue price.
The implications of this announcement are significant. For one, it highlights the potential of investing in SGBs as a way to earn high returns. It also underscores the importance of diversifying one’s portfolio to include alternative investment options such as gold. In recent years, gold has emerged as a hedge against market volatility, and SGBs have provided investors with a convenient and secure way to invest in gold.
The announcement also has implications for the broader economy. The fact that SGBs have provided such high returns is likely to attract more investors to the market, which could lead to an increase in demand for gold. This, in turn, could have a positive impact on the economy, as gold is a significant contributor to India’s imports.
In conclusion, the RBI’s announcement of the final redemption price of ₹12,801 for SGBs under the 2017-18 Series-XI is a significant development for investors. It highlights the potential of investing in SGBs as a way to earn high returns and underscores the importance of diversifying one’s portfolio. As the market continues to evolve, it will be interesting to see how investors respond to this news and how it affects the broader economy.
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