5 Minutes Read
This series of Sovereign Gold Bond will give 147% returns on premature redemption this week
KV Prasad Jun 13, 2022, 06:35 AM IST (Published)
Listen to the Article (6 Minutes)
Summary
Sovereign gold bonds or SGBs are issued by the government, for which investors get a holding certificate. It comprises government securities denominated in gold wherein investors are required to pay the issue price in cash.
The Reserve Bank of India (RBI) has announced the redemption price for sovereign gold bond (SGB) Series I of 2017-18 due on May 10, 2024. The premature redemption rate for the same is ₹7,165 per unit, which is a profit of ₹4,264 per unit and nearly 147% above the issue price.
Having been initially issued at ₹2,901 per unit, the redemption price is determined based on the simple average of the closing gold price of 999 purity over the preceding three business days, as reported by the India Bullion and Jewellers Association (IBJA).
For the premature redemption of SGB Series I of 2017-18, this average is calculated from April 29 to May 3, 2024.
How to initiate premature redemption
To initiate premature redemption, investors must approach the relevant bank/Stock Holding Corporation of India (SHCIL) office/post office/agent at least thirty days before the coupon payment date.
However, the request for premature redemption will only be processed if submitted at least one day before the coupon payment date, in adherence to the guidelines set by the RBI.
Upon redemption, the proceeds are directly deposited into the customer’s bank account specified during the bond application process, ensuring a seamless withdrawal experience for investors.
About SGBs
The SGBs, categorised as Government of India Stock under the Government Securities Act, 2006, offer investors a unique avenue for gold investment.
These allow investors to capitalise on gold price fluctuations without the complexities associated with physical gold transactions.
Upon subscription, investors are furnished with a Certificate of Holding, and these bonds can be converted into demat form.
Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout
3 Mins Read
Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter
Daily Newsletter
