If you bought Sovereign Gold Bond (SGB) 2019-20 Series V in October 2019 and are planning to sell it prematurely, i.e., before the completion of 8 years, you can do it now. From 15 April 2025, the facility for premature redemption of bonds of this series is available. The government has fixed the redemption price for this at Rs 9,069 per gram.
Now just think — you bought this bond for Rs 3,788 per gram, and now its rate is Rs 9,069 per gram. That is, in 5.5 years, you are getting a return of about 139%. And this calculation is based only on the price of gold; it does not include the 2.5% interest received every year.
Why is this opportunity special?
If you are in need of funds or want to book profits, then this time may be right for you. The tremendous increase in gold prices has made these bonds even more beneficial. Usually, people looking for a safe investment put their money in gold, but SGB has also given growth to investors in the last few years.
Also read: Is your investment in Sovereign Gold Bonds safe?
What is the rule for selling bonds?
The total tenure of SGBs is 8 years, but after the fifth year, you can also sell them prematurely. The government has provided this facility so that investors can withdraw profits if needed. The redemption price is decided based on the average price of 999 purity gold in the last three business days, which is released by the India Bullion and Jewelers Association (IBJA).
The benefit of interest will also continue
If you do not sell this bond now and keep it till maturity, then every year you will also get a fixed interest of 2.5%. This interest comes to your bank account every 6 months. That is, SGBs give returns not only on the increase in the price of gold, but also from interest.
Will SGB be available now?
The government did not issue any fresh tranche of SGBs last year. But the transactions and redemption of old bonds, which are already in the market, will continue as before. This means that if you have invested earlier, then you can take advantage of the full facility.
Also read: Sovereign Gold Bonds: How much does the govt pay to SGB holders for 130 tonnes gold?
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