SGB 2016-17 Series IV
Sovereign Gold Bond Scheme 2016-17 Series IV issue date was on March 17, 2017, premature redemption of Gold Bond may be permitted after fifth year from the date of issue of such Gold Bond on the date on which interest is payable. Accordingly, the third due date of premature redemption of the above tranche shall be March 17, 2023.
Also read: Sovereign Gold Bonds: What are the tax implications?
How the redemption is calculated
According to the RBI press release, “The redemption price of SGB shall be based on simple average of closing price of gold of 999 purity, of the week (Monday-Friday) preceding the date of redemption, as published by the India Bullion and Jewellers Association Ltd. (IBJA). Accordingly, the redemption price for premature redemption due on March 17, 2023 shall be Rs. 5557/- (Rupees Five thousand five hundred and fifty seven only) per unit of SGB based on the simple average of closing gold price for the week March 06-10, 2023.”
Tenure of the SGB
The tenure of the Sovereign Gold Bond Scheme is eight years. However, premature withdrawal can be done after the fifth year from the date of issuing of coupon payment dates.
SGB Interest rate
The SGB carry interest at the rate of 2.50 percent (fixed rate) per annum on the amount of the initial capital. Interest will be credited semiannually to the bank account and the last interest will be payable on maturity along with the principal.
What are the procedures involved during redemption?
According to the SGB FAQ, “The investor will be advised one month before maturity regarding the ensuing maturity of the bond. On the date of maturity, the maturity proceeds will be credited to the bank account as per the details on record. In case there are changes in any details, such as, account number, email ids, then the investor must intimate the bank/PO promptly.”
SGB details
There is no bar on investment by banks in Sovereign Gold Bonds. These will qualify for SLR. The bonds can be held in demat account. The bonds are tradable on stock exchanges from the date to be notified by RBI. The bonds can also be sold and transferred as per provisions of Government Securities Ac. Note that part holdings can be redeemed in multiples of one gm.