Gold Bond Investors to Get 333% Returns on December 2017 Issue
The Reserve Bank of India (RBI) has announced that the final redemption price for Sovereign Gold Bonds (SGBs) issued in December 2017 will be ₹12,801 per unit. This means that investors who purchased these bonds at the issue price of ₹2,954 per unit will receive a staggering return of around 333%. The RBI has also set the same price for premature redemption of SGBs issued in June 2019.
For those who may not be familiar with SGBs, they are a type of investment instrument issued by the Government of India, where investors can buy 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 SGBs issued in December 2017 were part of the Series-XI tranche, which had an issue date of December 11, 2017. At the time of issue, the price of one unit of the bond was ₹2,954, which was linked to the price of gold at that time. Over the years, the price of gold has fluctuated, and the value of the bond has increased accordingly.
The final redemption price of ₹12,801 per unit is a significant increase from the issue price, and it translates to a return of around 333% for investors who held the bonds until maturity. This is a remarkable return, considering that the bonds were issued just over five years ago.
It’s worth noting that the RBI has also set the same price for premature redemption of SGBs issued in June 2019, which is part of the 2019-20 Series I. This means that investors who purchased these bonds can also redeem them at the same price, even if they are redeeming them before the maturity date.
The high returns on SGBs can be attributed to the significant increase in the price of gold over the past few years. Gold prices have been on an upward trend, driven by a combination of factors such as economic uncertainty, inflation, and geopolitical tensions. As a result, the value of SGBs has also increased, providing investors with a substantial return on their investment.
The SGB scheme was introduced by the Government of India in 2015, with the aim of reducing the demand for physical gold and encouraging investors to buy gold in a non-physical form. The scheme has been successful, with many investors opting for SGBs as a way to invest in gold without having to physically hold the metal.
The high returns on SGBs are likely to attract even more investors to the scheme, particularly those who are looking for a safe-haven asset to invest in. Gold has traditionally been seen as a safe-haven asset, and SGBs provide investors with a convenient and secure way to invest in gold.
In conclusion, the announcement by the RBI that the final redemption price for SGBs issued in December 2017 will be ₹12,801 per unit is a significant development for investors. The returns of around 333% are a testament to the potential of SGBs as an investment instrument, and it’s likely that we will see even more investors opting for SGBs in the future.
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