Sovereign Gold Bond: RBI Sets Redemption Price For August 2016 At 122% Gain
Issued on Aug. 5, 2016, the bonds were price at Rs 3,119 per gram, with an annual interest rate of 2.5%.
The Reserve Bank of India on Friday set the redemption price for sovereign gold bond issued in August 2016 at Rs 6,938 per gram. Issued on Aug. 5, 2016 (termed SGB 2016 -17 Series I), the bonds were price at Rs 3,119 per gram.
Therefore, the redemption price of the SGB implies a gain of 122% for investors after eight years of holding the instrument.
The redemption price of SGB is based on the simple average of closing price of gold of 999 purity of the week preceding the date of redemption, as published by the India Bullion and Jewellers Association.
The SGB scheme, launched by the RBI on behalf of the government, has been a popular investment option due to its attractive features, including a fixed interest rate and tax benefits on capital gains if held to maturity.
The initial tranche of Sovereign Gold Bonds issued on Nov. 30, 2015, reached its final redemption in November 2023.
The original issue was offered an annual interest rate of 2.5% payable semi-annually, making it an attractive option for those seeking both capital appreciation and regular income.
