Gold Bond Investors to Get 333% Returns on December 2017 Issue
In a development that is sure to bring cheer to investors, the Reserve Bank of India (RBI) has announced that the final redemption price of ₹12,801 for Sovereign Gold Bonds under 2017-18 Series-XI with an issue date of 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 significant windfall for those who invested in the bonds, and it highlights the potential of gold as a lucrative investment option.
The Sovereign Gold Bond (SGB) scheme was launched by the Indian government in 2015 to reduce the demand for physical gold and to channelize the savings of individual investors into financial savings. The scheme allows investors to buy gold in the form of bonds, which are denominated in grams of gold. The bonds have a tenure of 8 years, with an option to exit after 5 years.
The issue price of the bonds is linked to the price of gold, and the redemption price is also linked to the price of gold at the time of redemption. In this case, the issue price of the bonds was ₹2,954 per unit, and the redemption price is ₹12,801 per unit. This represents a return of 333%, which is a significant gain for investors.
The RBI has also set the same price for premature redemption of 2019-20 Series I with an issue date of June 11, 2019. This means that investors who bought the bonds in 2019 will also be able to redeem them at the same price, although they will not get the same level of returns as those who invested in 2017.
The high returns on the gold bonds are a result of the significant increase in the price of gold over the past few years. Gold prices have been rising steadily since 2016, driven by a combination of factors such as geopolitical tensions, economic uncertainty, and monetary policy decisions. The COVID-19 pandemic has also contributed to the rise in gold prices, as investors have sought safe-haven assets in response to the economic disruption caused by the pandemic.
The returns on the gold bonds are also tax-free, which makes them an attractive option for investors. The interest earned on the bonds is exempt from income tax, and the capital gains tax is also exempt if the bonds are held for at least 3 years. This makes the gold bonds a highly attractive option for investors who are looking for a low-risk investment with high returns.
The success of the gold bond scheme is also a reflection of the Indian government’s efforts to promote financial inclusion and to reduce the demand for physical gold. The scheme has been successful in attracting investors, and it has helped to reduce the country’s gold imports. The government has also launched other initiatives such as the Gold Monetization Scheme and the Indian Gold Coin scheme to promote gold as an investment option.
In conclusion, the announcement of the final redemption price of the gold bonds is a significant development for investors. The high returns on the bonds are a result of the significant increase in the price of gold over the past few years, and they highlight the potential of gold as a lucrative investment option. The tax-free returns on the bonds also make them an attractive option for investors. As the Indian government continues to promote financial inclusion and to reduce the demand for physical gold, it is likely that the gold bond scheme will continue to attract investors.
The gold bond scheme is a great example of how investors can benefit from investing in gold without having to physically hold the metal. The scheme has been successful in attracting investors, and it has helped to reduce the country’s gold imports. The high returns on the bonds are a testament to the potential of gold as a lucrative investment option, and they are likely to attract even more investors to the scheme in the future.
Overall, the announcement of the final redemption price of the gold bonds is a positive development for investors, and it highlights the potential of gold as a lucrative investment option. The scheme has been successful in attracting investors, and it has helped to reduce the country’s gold imports. As the Indian government continues to promote financial inclusion and to reduce the demand for physical gold, it is likely that the gold bond scheme will continue to attract investors.
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