Gold Bond Redemption:
The Reserve Bank of India (RBI) has announced very good news for people who invested in Sovereign Gold Bonds (SGB) during the 2020-21 Series-I issue. The central bank has fixed the premature redemption price at ₹12,198 per unit. Investors can start redeeming their bonds in cash from Tuesday, October 28.

Gold Bond Redemption:

When these SGBs were first offered, the price was much lower. People who bought online paid ₹4,589 per gram, while offline investors paid ₹4,639 per gram. Within only five years, the value has almost tripled. Online investors have gained up to 166 percent total returns. In addition to this growth, investors also received 2.5 percent annual interest every year. This combination has given them a strong financial advantage.

RBI said that the redemption price was calculated based on the average closing price of 999 purity gold for the three business days of October 23, 24, and 27, as published by the India Bullion and Jewellers Association (IBJA).

According to the rules, SGBs can be redeemed early after the completion of five years from the issue date. The redemption is allowed on interest payment dates during this period. The full maturity period of SGBs is 8 years, but early exit is provided to give flexibility to investors.

Sovereign Gold Bonds were launched by the Government of India to reduce gold imports and promote savings in financial assets instead of physical gold. RBI issues these bonds on behalf of the central government. Investors can also trade SGBs on stock exchanges, transfer them to others, or use them as collateral to get loans from banks.

SGBs have become a popular investment because they provide the benefit of gold price growth without the risk and cost of storing physical gold. This latest redemption price shows that long-term gold investment through SGBs can be very profitable.

With gold prices rising steadily over the years, many investors are now looking at SGBs as a safe and rewarding option for the future.

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