 "325% returns on SGB 2017-18 Series-IV as RBI announces redemption date")
Investors in the Sovereign Gold Bond (SGB) 2017-18 Series-IV are set for substantial gains, as the Reserve Bank of India (RBI) has announced the final redemption price and date for the eight-year gold-linked government securities.
Final redemption date and price
The RBI said that the bonds issued on October 23, 2017, will reach maturity on October 23, 2025. The final redemption price has been fixed at Rs 12,704 per unit, calculated on the basis of the simple average of gold’s closing price (999 purity) over three business days-- October 17, 20, and 22, 2025.
Exceptional returns
The 2017-18 Series-IV SGBs were originally issued at Rs 2,987 per gram. Investors will earn an absolute return of nearly 325 per cent, translating to a gain of Rs 9,717 per bond before accounting for interest.
- Issue price: Rs 2,987 per gram
- Redemption price: Rs 12,704 per gram
- Absolute gain: Rs 9,717
- Percentage return: 325 per cent
This performance makes SGBs an attractive alternative to holding physical gold, combining capital appreciation with the safety of a government-backed instrument.
Early exit and flexibility
SGBs have a fixed tenure of eight years, but investors can redeem them after the completion of the fifth year, as per RBI guidelines. This allows some liquidity without compromising the core benefit of gold-linked returns.
Nominee claims and succession
In the event of the death of a bondholder, nominees can claim the redemption amount through the designated receiving offices. If there is no nomination, claims can be made by executors, administrators, or holders of a succession certificate, following the provisions of the Government Securities Act, 2006. These rules also apply to deceased minor investors, ensuring that the bonds are transferred as per legal criteria rather than automatically to a natural guardian.
With the final redemption of SGB 2017-18 Series-IV, investors who held onto their bonds since issuance now see one of the most lucrative gold-linked returns in recent times, reinforcing the appeal of sovereign bonds for conservative wealth creation.