The redemption price is calculated as the simple average of the closing gold prices for the three business days preceding the redemption date—November 29, December 2, and December 3, 2024—published by the India Bullion and Jewellers Association Ltd. (IBJA).
Premature redemption terms
Bondholders can opt for premature redemption of this tranche on December 4, 2024. Key conditions include:
Redemption is allowed only after five years from the issue date.
The redemption date must align with an interest payment schedule, which in this case is December 4, 2024.
Redemption process
Investors can redeem their bonds through the bank, post office, or other channels where the bonds were originally purchased.
Why SGBs are attractive
High returns: Excluding the 2.5% annual interest component, the bond’s capital appreciation from ₹2,961 to ₹7,646 per gram highlights its wealth-generation potential.
Tax-free maturity: Redemption proceeds are exempt from tax for individual investors.
Secure alternative: SGBs offer a safer and more convenient investment compared to physical gold, with no risk of theft or storage costs.
Liquidity options
While SGBs have an eight-year maturity period, premature redemption and stock exchange trading provide flexibility for investors.
Investors should ensure they follow the proper redemption process by approaching the designated financial institutions before the due date.
First Published: Dec 4, 2024 2:12 PM IST
