Final redemption price of SGB 2018-19 Series-IThe gold bond will be repayable on the expiration of eight years from the date of the issue of gold bonds. Accordingly, the final redemption date of the above tranche will be May 4, 2026.
What is the final redemption price of SGB 2018-19 Series-I?
The final redemption price for the SGB series due on May 4, 2026, is Rs 14,901 per unit of SGB. The final price of SGB is based on the simple average of the closing price of gold for the three business days, i.e., April 28, April 29 and April 30, 2026.
The SGB 2018-19 Series-I was issued at Rs 3,064 per gram for online buyers. (Nominal value: Rs 3,114/- less additional discount of Rs 50/- for online applications). It will yield an absolute simple return of nearly 386% on the date of final redemption.
The absolute return comes to be Rs 14,901 -Rs 3,064 = Rs 11,837 (without factoring in the interest). In percentage terms, it is 11,837÷ 3,064 ×100 = 386.32%
So, the current value of Rs 1 lakh investment in the SGB at the time of its launch will be;
Rs 1,00,000 + Rs 38632= Rs 4,86,320 (approximately).
The bonds bear interest at the rate of 2.50% (fixed rate) per annum on the amount of the initial investment. Interest is credited semi-annually to the bank account of an investor and the last interest is payable on maturity along with the principal.
How is the SGB redemption price calculated?
The redemption value is calculated based on the simple average closing price of 999 purity gold published by the India Bullion and Jewellers Association (IBJA) for the preceding three working days, as per an RBI rule.
What is a Sovereign Gold Bond (SGB)? Who is the issuer?
SGBs are government securities denominated in grams of gold. They are substitutes for holding physical gold. Investors have to pay the issue price in cash and the bonds will be redeemed in cash on maturity. The bond is issued by the RBI on behalf of the Government of India.
What are the minimum and maximum limits for SGB investment?
Sovereign gold bonds are issued in denominations of one gram of gold and in multiples thereof. The minimum investment in the bonds allowed is one gram of gold, while the maximum limit is 4 kg gold for individuals. For Hindu Undivided Family (HUF), the maximum limit is 4kg of gold, while it is 20 kg for trusts and similar entities notified by the government from time to time per fiscal year (April – March). In case of joint holding, the limit applies to the first applicant.
Leave a comment