Huge Returns for Sovereign Gold Bond Investors

Investors who purchased Sovereign Gold Bonds (SGBs) in 2021 are set to make substantial gains, with returns exceeding 200% on their initial investment, based on the latest redemption price. The Reserve Bank of India (RBI) has announced November 2 as the premature redemption date for the 2021-22 Series VII Sovereign Gold Bonds. The redemption price has been fixed at ₹14,167 per gram. At the time of issuance, the bonds were available at ₹4,765 per gram for offline purchases and ₹4,715 per gram for online purchases after a ₹50 discount. Based on the online issue price, investors stand to gain ₹9,452 per gram. The bonds also offer an annual interest rate of 2.5% on the initial investment.

Sovereign Gold Bonds have an overall maturity period of eight years, but investors are allowed to opt for premature redemption after completing five years from the date of issue. The RBI announces eligible redemption dates for investors who wish to exit before maturity. To calculate the redemption price, the average closing price of gold published by the India Bullion and Jewellers Association (IBJA) for the last three working days of the week preceding the redemption date is considered. Accordingly, the redemption price for this tranche has been determined based on the gold prices recorded on October 28, 29 and 30.