SGB Investors See 302% Returns in 6 Years; RBI Announces Redemption Price
Chennai: Investing in gold through Sovereign Gold Bonds (SGBs) has proven far more rewarding than buying physical gold, according to a recent update from the Reserve Bank of India.
The RBI has announced the premature redemption price for SGB 2019–20 Series-V bonds at ₹15,009 per gram. These bonds, issued on October 15, 2019, are now eligible for early redemption from April 15, 2026, after completing five years.
Sharp Rise in Returns
The issue price in 2019 was ₹3,738 per gram, which means investors have earned a return of about 302% in six years. For example, an investment of ₹1 lakh back then would now be worth around ₹4.02 lakh, purely from gold price appreciation.
Extra 2.5% Interest Benefit
Apart from price gains, SGB investors also earn 2.5% annual interest, paid every six months. This further increases the overall returns.
How Price is Fixed
The redemption price is based on the average closing price of 999 purity gold published by the India Bullion and Jewellers Association over the last three working days before redemption.
Why SGBs Stand Out
- No making charges or wastage
- No risk of theft
- Assured purity
- Capital gains tax exemption if held till maturity (8 years)
Redemption Process
Investors can redeem their bonds through banks, post offices, or authorised agents by submitting their holding certificate and bank details. The amount will be credited directly to their account.
With gold prices rising steadily in recent years, SGBs have emerged as a strong long-term investment option. However, financial experts advise investors to assess risks carefully and seek professional guidance before investing.
