The Reserve Bank of India (RBI) has fixed the price for premature withdrawal of Sovereign Gold Bond 2016 Series I at Rs 5945 and the due date is on August 8, 2023.
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Premature redemption
Sovereign Gold Bond Scheme, premature redemption of Gold Bond will be permitted after fifth year from the date of issue of such Gold Bond on the date on which interest is payable.
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How is it calculated
The redemption price of SGB shall be based on simple average of closing price of gold of 999 purity, of the week (Monday-Friday), preceding the date of redemption, as published by the India Bullion and Jewellers Association Ltd (IBJA). Accordingly, the redemption price for premature redemption due on August 08, 2023 shall be Rs 5945 per unit of SGB based on the simple average of closing gold price for the week July 31-August 04, 2023.
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Sovereign Gold Bond
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.
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Who is eligible to invest in the SGBs?
Persons resident in India as defined under Foreign Exchange Management Act, 1999 are eligible to invest in SGB. Eligible investors include individuals, HUFs, trusts, universities and charitable institutions.
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Minimum and maximum contributions
An investor/trust can buy 4 Kg/20 Kg worth of gold every year as the ceiling has been fixed on a fiscal year (April-March) basis.. The maximum limit will be applicable to the first applicant in case of a joint holding for that specific application.
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SGB rate of interest
The Bonds offer a 2.50 percent (fixed rate) interest rate on the amount of the initial investment. The investor’s bank account will get interest credits twice a year, and the last interest payment will be due at maturity along with the principal.
