According to an RBI press release dated December 3, 2024, “In terms of GOI Notification F.No.4(25)–W&M/2017 dated October 06, 2017 (SGB 2017-18 Series X – Issue date December 04, 2017) on Sovereign Gold Bond Scheme, 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 next due date of premature redemption of the above tranche shall be December 04, 2024.”
What is the redemption price of SGB?
The redemption price for premature redemption due on December 04, 2024, shall be Rs 7,646 per unit.
This particular SGB 2017-18 Series X was issued at Rs 2,961 per gram on December 04, 2017. So, the absolute return comes to Rs 7646-2,961= Rs 4685 (without factoring in the interest). In percentage terms, it comes to Rs {(4685/2961) *100} %= 158.22%
So, if the investors opt for premature withdrawal, then the absolute return will be 158.22%.
How to apply for premature redemption of SGB 2017-18 Series X?
As per the RBI FAQs, “In case of premature redemption, investors can approach the concerned bank/SHCIL offices/Post Office/agent thirty days before the coupon payment date. Requests for premature redemption can only be entertained if the investor approaches the concerned bank/post office at least one day before the coupon payment date. The proceeds will be credited to the customer’s bank account provided at the time of applying for the bond,”
How is SGB redemption price calculated?
The redemption price of sovereign gold bonds will be based on the simple average of closing gold price of 999 purity of previous three business days from the date of redemption, as published by the India Bullion and Jewellers Association Ltd (IBJA). Accordingly, the current redemption price for SGB 2017-18 Series X is based on the simple average of closing gold price for three business days i.e., November 29, December 02, and December 03, 2024.
What are Sovereign Gold Bonds?
Sovereign Gold Bonds (SGBs) are a government security that are an alternative to physical gold. The Reserve Bank of India (RBI) issues SGBs on behalf of the Government of India. With a fixed interest rate of 2.5% annually, SGBs provide a consistent income. Throughout the bond’s term, the interest rate will remain constant. SGBs give investors liquidity and can be traded on the stock exchanges.