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. As per the announcement, the final redemption price for SGBs under the 2017-18 Series-XI, which was issued on December 11, 2017, has been set at ₹12,801 per unit. This means that investors who purchased the bonds at ₹2,954 per unit will receive a staggering return of around 333% on their investment.
For those who may not be familiar, SGBs are a type of investment instrument introduced by the Government of India to allow citizens to invest in gold in a non-physical form. The bonds are denominated in grams of gold and can be purchased in multiples of one gram, with a minimum investment of one gram and a maximum investment of four kilograms. The bonds have a tenure of eight years, with an option to exit after the fifth year.
The SGBs issued in December 2017 were part of the government’s efforts to reduce the demand for physical gold and to encourage investors to invest in a more secure and transparent way. The bonds were priced at ₹2,954 per unit, which was lower than the prevailing market price of gold at that time. The idea was to provide investors with an alternative to buying physical gold, while also helping the government to reduce its gold imports.
Fast forward to the present, and it’s clear that investors who bought the SGBs in December 2017 have made a wise decision. With the final redemption price set at ₹12,801 per unit, investors will receive a return of around 333% on their investment, which is a significant windfall. This return is not only impressive but also highlights the potential of SGBs as a viable investment option.
It’s worth noting that the RBI has also set the same price for premature redemption of SGBs under the 2019-20 Series I, which was issued on June 11, 2019. This means that investors who purchased the bonds in June 2019 can also exit their investment at the same price, although it’s likely that the returns will be lower since the bonds have not completed their full tenure.
The announcement of the final redemption price for SGBs is a significant development for investors who have been waiting for the outcome of their investment. It’s also a testament to the government’s efforts to provide a secure and transparent investment option for citizens. With the returns on SGBs being significantly higher than other investment options, it’s likely that we will see an increase in demand for these bonds in the future.
In conclusion, the announcement of the final redemption price for SGBs issued in December 2017 is a welcome development for investors. With returns of around 333%, it’s clear that SGBs have emerged as a highly attractive investment option. As the government continues to promote SGBs as a viable alternative to physical gold, it’s likely that we will see an increase in demand for these bonds in the future.
About the Author
