100% returns in 5 years—Redeem this sovereign gold scheme now!
What's the story
The Reserve Bank of India (RBI) has set the redemption price for the Sovereign Gold Bond (SGB) 2020-21 Series 2 at ₹9,284 per unit.
The rate is based on the average gold prices between May 14 and May 16, according to the India Bullion and Jewellers Association.
The original issue price of the SGB was ₹4,590 per gram for offline applicants and ₹4,540/g for those applying online.
Gains
Significant returns on investment
At the current redemption price of ₹9,284 per unit, this translates to a massive gain of 103% over the offline issue price and 104.5% over the online issue price. These returns exclude the semi-annual interest earned at a rate of 2.5% over five years.
Procedure
How to redeem the SGBs?
Investors must note that the redemption isn't automatic.
Bondholders have to place a request through their demat account provider, bank, or the agent from whom they bought the bond.
The request should be placed at least 10 days before the interest payout date, to ensure timely processing and not missing out on potential gains from early redemption.