Gold bond investors to get 333% returns on December 2017 issue
In a remarkable 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 staggering return of around 333%. The RBI has also set the same price for premature redemption of the 2019-20 Series I, which was issued on June 11, 2019.
The Sovereign Gold Bond (SGB) scheme was launched by the Government of India in 2015 to reduce the demand for physical gold and to provide an alternative investment option for investors. The scheme allows investors to buy gold in a non-physical form, with the added benefit of earning interest on their investment. The SGBs are denominated in grams of gold and are issued in tranches, with each tranche having a specific issue price.
The 2017-18 Series-XI SGB was issued on December 11, 2017, at a price of ₹2,954 per unit, which is equivalent to the price of one gram of gold at that time. The bond has a tenure of eight years, with an option to exit after the fifth year. The interest on the bond is paid at a rate of 2.5% per annum, which is payable semi-annually.
The final redemption price of ₹12,801 for the 2017-18 Series-XI SGB 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 remarkable return on investment. This return is not only due to the increase in the price of gold but also due to the interest earned on the investment over the years.
The RBI has also set the same price for premature redemption of the 2019-20 Series I SGB, which was issued on June 11, 2019. This means that investors who bought the bonds at the issue price of ₹3,146 per unit will get a return of around 307%, if they choose to redeem their bonds prematurely.
The high returns on SGBs are due to the significant increase in the price of gold over the years. The price of gold has been on an upward trend due to various factors, including economic uncertainty, geopolitical tensions, and a decline in the value of the US dollar. As a result, the price of gold has increased significantly, resulting in high returns for investors who invested in SGBs.
The SGB scheme has been a successful initiative by the Government of India to reduce the demand for physical gold and to provide an alternative investment option for investors. The scheme has attracted a large number of investors, including individual investors, institutional investors, and even foreign investors. The scheme has also helped to reduce the country’s gold imports, which has had a positive impact on the country’s trade deficit.
In conclusion, the announcement of the final redemption price of ₹12,801 for the 2017-18 Series-XI SGB is a significant development for investors who bought the bonds at the issue price of ₹2,954 per unit. The return of around 333% is a remarkable return on investment, which is due to the significant increase in the price of gold over the years. The SGB scheme has been a successful initiative by the Government of India, and it is expected to continue to attract investors who are looking for a safe and profitable investment option.
The news of high returns on SGBs is likely to attract more investors to the scheme, which could lead to an increase in demand for SGBs in the future. The RBI is likely to continue to issue SGBs in the future, which will provide investors with an opportunity to invest in gold in a non-physical form and earn interest on their investment.
As the demand for SGBs continues to grow, it is likely that the Government of India will take steps to further develop the scheme and make it more attractive to investors. This could include increasing the frequency of issuance, introducing new features, and providing more flexibility to investors.
In the meantime, investors who are looking for a safe and profitable investment option may consider investing in SGBs. The scheme has a proven track record of providing high returns, and it is expected to continue to do so in the future. However, investors should be aware of the risks associated with investing in SGBs, including the risk of a decline in the price of gold.
In the current economic environment, investing in SGBs could be a good option for investors who are looking for a safe and profitable investment option. The scheme has a low risk profile, and it provides a regular income stream in the form of interest payments. Additionally, the scheme has a fixed tenure, which means that investors can plan their investments accordingly.
Overall, the announcement of the final redemption price of ₹12,801 for the 2017-18 Series-XI SGB is a significant development for investors who bought the bonds at the issue price of ₹2,954 per unit. The return of around 333% is a remarkable return on investment, which is due to the significant increase in the price of gold over the years. The SGB scheme has been a successful initiative by the Government of India, and it is expected to continue to attract investors who are looking for a safe and profitable investment option.
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