The Reserve Bank of India has set the premature redemption price for Sovereign Gold Bond 2019-20 Series-I at Rs 15,038 per unit. This offers investors a 378% return, turning a Rs 1 lakh investment into approximately Rs 4.78 lakh, excluding interest.
This development highlights the significant returns investors can achieve through Sovereign Gold Bonds, demonstrating their potential as an investment vehicle that tracks gold prices while offering additional interest.
The Reserve Bank of India (RBI) has announced the premature redemption price for Sovereign Gold Bond 2019-20 Series-I, which was issued on June 11, 2019. Investors will have the option to redeem these bonds prematurely from June 11, 2026, after the fifth year from the issue date, on an interest payment date.
The premature redemption price has been fixed at Rs 15,038 per unit. This price is calculated based on the simple average of the 999 purity gold closing price published by the India Bullion and Jewellers Association (IBJA) for the three working days preceding the redemption date.
With an initial issue price of Rs 3,146 per gram for online purchases, the SGB 2019-20 Series-I offers an absolute simple return of 378% upon premature redemption. This means an initial investment of Rs 1 lakh could potentially grow to Rs 4.78 lakh, excluding any interest earned. For offline purchases, the issue price was Rs 3,196 per gram.
Sovereign Gold Bonds (SGBs) are government securities denominated in grams of gold, serving as an alternative to holding physical gold. They are issued by the RBI on behalf of the Government of India and are redeemed in cash. These bonds carry a fixed annual interest rate of 2.50% on the initial investment amount, paid semi-annually.
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