Investors holding the Sovereign Gold Bond (SGB) 2016-17 Series III, issued on November 17, 2016, will see the final redemption of their bonds on November 16, 2024. The redemption price is set at Rs 7,788 per gram. Investors who bought this SGB at its original issue price of Rs 3,007 per gram in 2016 will make a profit of Rs 4,781 per gram upon redemption.

This represents an approximate 159% return on your investment over the eight-year period.

This calculation excludes the 2.50% annual interest rate paid semiannually during the life of the bond.

How the refund price is calculated

The RBI fixes the final redemption price based on the average closing price of 999 purity gold of the previous week, as reported by the India Bullion and Jewelers Association Ltd. (IBJA).

For this tranche, the average gold price between November 4 and November 8, 2024 determined the rate of ₹7,788.

Steps to redeem

The redemption proceeds will be automatically credited into the bank accounts linked to the demat accounts of the bondholders. Investors do not need to take any additional steps if their banking and demat details are updated.

However, they should verify the account details and ensure there are no discrepancies to avoid delays.

If investors prefer not to redeem, they can also trade the bonds on stock exchanges, although the market price will vary depending on gold prices and demand.

Advantages of investing in SGB

Invest in Sovereign gold bonds offers several advantages:

Tax benefits: Capital gains from SGBs are tax-free at the time of redemption, adding to net returns for investors.

Safety and ease: SGBs provide a safe and convenient way to invest in gold without the hassles associated with physical gold.

Government Backing: As government securities, they offer an additional layer of security and stability.