There is great news for those investors who had invested money in Sovereign Gold Bond (SGB) in 2020. The Reserve Bank of India (RBI) has announced the date and price of premature redemption for SGB 2020-21 Series-III. After which it has become clear that gold bonds have given excellent returns to investors in the last five years.
Sovereign Gold Bond is a scheme of the Government of India, which is managed by RBI. Its total maturity period is 8 years, but investors get the option of premature redemption after completion of 5 years. This means that if investors wish, they can withdraw their money midway without waiting for the full 8 years.
Issue Price of SGB 2020-21 Series-III
This series was released on 16 June 2020. At that time, its price for offline investors was kept at Rs 4,677 per gram. Those who had applied online and made digital payment got a discount of Rs 50 per gram. The issue price for such investors was Rs 4,627 per gram.
At what price will you get the money now
According to RBI, the premature redemption date of SGB 2020-21 Series-III has been fixed as December 16, 2025. The price available on this has been decided on the basis of the average price of gold of the last three trading days. According to this, the redemption price of gold bond per gram will be Rs 13,152.
How an investment of Rs 5 lakh became Rs 14.2 lakh
If an investor had invested around Rs 5 lakh in 2020, then at the current redemption price its value becomes around Rs 14.2 lakh. If we look only at the price, there is a profit of about Rs 8,525 per gram invested. In percentage terms, this is a simple return of about 184%, in which interest is not included.
Extra income from interest
Another special thing about SGB is that investors also get 2.5% interest every year. This interest is deposited directly into the bank account every six months. The last interest payment is made along with the principal amount at the time of redemption or maturity, thereby increasing the total returns.
Why is SGB better than physical gold?
Sovereign Gold Bond is a safe alternative to physical gold. There is neither fear of theft nor concern about purity. These bonds are transferable, traded on exchanges and can also be pledged for loans if needed.
How is the price determined?
The price of SGB is based on the price of gold of 999 purity released by the India Bullion and Jewelers Association (IBJA). Its price is decided by taking the average of three trading days preceding the subscription.
