RBI Announces 325% Return on Sovereign Gold Bond Series
The Reserve Bank of India has fixed the final redemption price for its Sovereign Gold Bonds (SGBs) from the 2017-18 Series IV at ₹12,704 per gram, delivering a massive 325% absolute return over eight years.
Key Takeaways
- Final redemption date: October 23, 2025.
- Redemption price: ₹12,704 per gram.
- Issue price (2017): ₹2,987 per gram.
- Absolute gain: ₹9,717 per gram.
- Return: 325%, excluding 2.5% annual interest.
Redemption Price Calculation
The RBI calculates the final SGB redemption price based on the simple average of the closing gold price (999 purity) from three business days before redemption. For this series, prices from October 17, 20, and 22, 2025, were considered, as published by the India Bullion and Jewellers Association (IBJA).
Investment Returns Breakdown
Issued on October 23, 2017, at ₹2,987 per gram, the bond’s maturity payout of ₹12,704 results in a total gain of ₹9,717 per gram. Investors who applied and paid online received an even lower issue price of ₹2,937 per gram, enhancing their returns further.
Total Returns and Interest
The 325% absolute return is calculated on the principal gain. This figure does not include the additional 2.5% annual interest that SGB holders received semi-annually throughout the bond’s eight-year tenure.
Key Benefits of Sovereign Gold Bonds
- Automatic Redemption: The maturity amount is automatically credited to the investor’s bank account.
- Tax Exemption: Redemption gains are exempt from capital gains tax for individuals.
- Loan Collateral: These RBI-issued bonds can be used as collateral for loans.
This announcement provides clarity for investors in the 2017-18 Series IV, confirming a highly profitable outcome for this government-backed gold investment.
