Investors who purchased these bonds during their issue in November 2017 at ₹2,961 per gram are now realising a return of approximately 152%.
This calculation excludes the annual interest of 2.50%, paid biannually throughout the bond’s tenure.
Why is it considered premature redemption?
Under the SGB scheme, premature redemption is allowed after the fifth year from the bond’s issue date and must align with the bond’s interest payment dates.
For Series VIII, issued on November 20, 2017, the first opportunity for premature redemption occurred in November 2022, following the completion of five years.
The new redemption date on November 19, 2024, offers another such opportunity for eligible investors.
The maturity date for these bonds remains November 20, 2025.
How the redemption price is calculated
The redemption price of SGBs is determined by the simple average of the closing gold prices of 999 purity for the last three business days before the redemption date, as published by the India Bullion and Jewellers Association Ltd. (IBJA).
How to redeem prematurely
To redeem SGBs prematurely, follow these steps:
Contact the bank or financial institution where the bonds were originally purchased and initiate a redemption request.
The redemption amount will be credited based on the RBI-specified price.
The redemption amount will be deposited directly to the bank account linked with the bond, typically within a few working days post-redemption.
First Published: Nov 19, 2024 10:01 AM IST
