RBI Announces Maturity of Sovereign Gold Bonds: Investors to Receive Triple Returns

The Reserve Bank of India (RBI) has delivered good news to investors who had purchased Sovereign Gold Bonds (SGBs) eight years ago. The central bank has announced that the maturity date for the 2016-17 Series-4 bonds is set for March 17, and investors are expected to receive nearly three times their initial investment.

The Sovereign Gold Bond scheme was launched in November 2015 to reduce the demand for physical gold. These bonds have a tenure of eight years. The RBI has now declared the maturity price for the fourth tranche of bonds issued in March 2017. At the time of issuance, these bonds were priced at ₹2,943 per gram. The maturity price has now been fixed at ₹8,624 per gram, meaning that an investor who had invested ₹1 lakh at the time will now receive approximately ₹3 lakh. In addition to this capital appreciation, investors have also earned an annual interest of 2.50% on the bonds.

The maturity price of the bonds is determined based on the average price of 999-purity gold, as set by the Indian Bullion and Jewellers Association Limited, in the week leading up to the maturity date. Similarly, the RBI has also announced that the pre-maturity window for the 2019-20 Series-4 bonds is set for March 17, with the redemption price fixed at ₹8,634 per gram. This price is based on the average closing price of gold over the last three working days before maturity (March 11, 12, and 13).

With global gold prices reaching record highs, the maturity of Sovereign Gold Bonds at this time has proven highly beneficial for investors.

The Sovereign Gold Bond scheme was introduced in the 2015-16 Union Budget, and these bonds are issued by the RBI on behalf of the central government. The most recent subscription window for SGBs was open from February 12 to 16, 2024, after which no new issuances have been announced.