Sovereign Gold Bond
These days, due to reduction in global tension, gold prices are falling. Gold prices are continuously decreasing. Even today, there is a continuous decline in the prices of gold and silver on MCX. The price of gold came to around Rs 1,18,973 per 10 grams, which shows a decline of around 1.40%. Meaning the price of gold has decreased by Rs 1,693. But in the meantime, RBI has announced pre-redemption of its Gold Bond Series 2019-20. In this, you will get an excellent return of about 217 percent on redemption. Let us know about all the details related to this.
The Reserve Bank of India has announced the premature redemption price of Sovereign Gold Bond (SGB) 2019-20 Series-VI-Issue as of October 30, 2019. According to a statement from the Central Bank, investors will have the option to prematurely redeem these SGBs on October 30, 2025. The duration of SGB is 8 years, but premature redemption of the bond is allowed after the fifth year from the issue date. This phase of 2020-21 Series-VII issue was open for subscription from October 21-25, 2019. The bonds were issued on October 30, 2019.
RBI said in a statement that in accordance with the Government of India Notification No. 4(7)-B (W&M)/2019 dated September 30, 2019 (SGB 2019-20 Series-VI-Issue Date October 30, 2019) on the Sovereign Gold Bond Scheme, premature redemption of gold bonds will be permitted from the issue date. After 5 years, it can be given on the date on which interest is payable. Accordingly, the next due date for premature redemption of the above installment will be October 30, 2025.
The redemption price for premature redemption payable on October 30, 2025, based on the simple average of the closing prices of gold on three working days, i.e. October 27, 2025, October 28, 2025 and October 29, 2025, will be Rs 11,992 per unit of SGB. It was issued at Rs 3,835 per gram without discount.
The issue price of Gold Bond Series is Rs 3,785 per gram gold. For online investors, this will give a full simple return of almost 217% on premature redemption date. If we talk about calculation, then full return = 11,992 – 3,785 = Rs 8,207 without including interest and if seen in percentage, it is 8207 ÷ 3785 × 100 = 216.82%.
