Early redemption price for government gold bonds: Payout of this SGB series at 158% above the issue price

Sovereign gold bond: RBI announces early SGB repayment dates for October 2024 to March 2025, see details

An RBI press release dated December 3, 2024 states: “In terms of GOI notification F.No.4(25)–W&M/2017 dated October 6, 2017 (SGB 2017-18 Series X – Issue date December 4, 2017 ) Under the Sovereign Gold Bond Scheme, early repayment of the gold bond may be permitted five years from the date of issue of the gold bond at which interest accrues numbers are. The next due date for the early repayment of the above-mentioned tranche is December 4th, 2024.”

How much is the SGB repayment price?

The redemption price for early redemption due on December 4, 2024 is Rs 7,646 per share.

This particular SGB 2017-18 Series Percentage is Rs {(4685/2961) *100} %= 158.22%

So if investors decide to cash out early, the absolute return is 158.22%.

How do I request early redemption of SGB 2017-18 Series X?

The RBI FAQs says: “In case of early redemption, investors may contact the concerned bank/SHCIL office/post office/agent 30 days before the coupon payment date. Requests for early repayment can only be considered if the investor contacts the bank concerned.” /Post office no later than one day before the coupon payment date. The proceeds will be credited to the customer’s bank account specified when applying for the deposit.

How is the SGB repayment price calculated?

The redemption price of Sovereign Gold Bonds is based on the simple average of the closing price of 999 purity gold for the last three business days from the redemption date as published by the India Bullion and Jewelers Association Ltd (IBJA). The current redemption price for SGB 2017-18 Series is based accordingly

What are government gold bonds?

Sovereign Gold Bonds (SGBs) are government securities that provide an alternative to physical gold. The Reserve Bank of India (RBI) issues SGBs on behalf of the Government of India. With a fixed interest rate of 2.5% per year, SGBs ensure a consistent income. The interest rate remains constant throughout the life of the bond. SGBs provide investors with liquidity and can be traded on stock exchanges.