RBI: Big news for everyone. On Wednesday, the Reserve Bank of India (RBI) set the redemption price for two older series of Sovereign Gold Bonds at Rs 12,801 per unit. This amount will be paid to investors who bought units in the SGB 2017-18 series that was issued on December 11, 2017.
As per the RBI, investors initially invested Rs 2,954 per unit. Now, at maturity, they will receive Rs 12,801 per unit. Furthermore, during this period, investors earned 2.5% annual interest, which is a significant feature of Sovereign Gold Bonds. This indicates that those who participated in this scheme benefited from the increase in gold prices while also receiving regular interest income.
The Sovereign Gold Bond Scheme was introduced by the central government and the RBI to curb the tendency of buying physical gold in the country, as India ranks among the largest gold importers globally. This bond offers individuals a safe and secure way to invest in gold digitally, eliminating concerns about storage and providing interest earnings. The new redemption price announced by the RBI is turning out to be a substantial benefit for investors who purchased at a lower price seven years ago, as they are now enjoying favorable returns based on the current market price.
The initiative was introduced to discourage citizens of the nation, which is among the top gold importers globally, from putting their money into physical gold. The surge in gold prices in recent months has resulted in reports highlighting the significant profits that investors could potentially earn.
Additionally, the RBI revealed that the price for early redemption of the 2019-20 Series I, due on December 11, 2025, will remain at Rs 12,801 per unit. According to the RBI, the prices are determined based on the simple average of the closing price of 999 purity gold over the last three working days prior to the redemption date, as reported by the India Bullion and Jewellers Association Ltd (IBJA).