Rs 1 lakh investment in gold bonds turns into Rs 4.49 lakh: SGB 2018-19 Series V premature redemption date today
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RBI redemption price of SGB 2018-19 Series V
The Reserve Bank of India (RBI) has announced the premature redemption price for Sovereign Gold Bond SGB 2018-19 Series-V. According to a statement from the central bank, investors will have the option to redeem this SGB tranche prematurely from July 22, 2026.
The premature redemption of the SGB series will be permitted after the fifth year from the date of the issue of such gold bonds on the date on which interest is payable, as per the RBI statement.
The premature redemption of the SGB series will be permitted after the fifth year from the date of the issue of such gold bonds on the date on which interest is payable, as per the RBI statement.
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How is the SGB redemption price calculated?
The redemption value of an SGB is calculated based on the simple average closing price of the gold of 999 purity published by the India Bullion and Jewellers Association (IBJA) for the preceding three working days, as per an RBI rule.
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What is the premature redemption price for SGB 2018-19 Series-V?
The premature redemption price due on July 22, 2026, has been fixed at Rs 14,218 per unit of SGB, based on the simple average of the closing price of gold for the last three business days, i.e., July 17, July 20 and July 21, 2026.
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How much profit did investors make on SGB 2018-19 Series-V?
For investors who bought SGBs of the same series offline, the issue price was Rs 3,214 per gram of gold. A Rs 50 discount was available on the online purchase of the SGB. The SGB 2018-19 Series-V was issued at Rs 3,164 per gram for online bonds.
The absolute return comes to be Rs 14,218 -Rs 3,164= Rs 11,054 (without factoring in interest). In percentage terms, this translates into an absolute return of (Rs 11,054 ÷ Rs 3,164) × 100 = 349.4%
The absolute return comes to be Rs 14,218 -Rs 3,164= Rs 11,054 (without factoring in interest). In percentage terms, this translates into an absolute return of (Rs 11,054 ÷ Rs 3,164) × 100 = 349.4%
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What would Rs 1 lakh invested in SGB 2018-19 Series-V be worth today?
An absolute return of 349.4% means that an investment of Rs 1 lakh in this SGB at the time of its issuance has grown to a little over Rs 4.49 lakh on premature redemption, excluding a 2.5% annual interest paid on the bond. This represents long-term capital gains of about Rs 3.49 lakh over the principal amount.
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What is a Sovereign Gold Bond (SGB)? Who is the issuer?
SGBs are government securities denominated in grams of gold. They are substitutes for holding physical gold. Investors have to pay the issue price in cash and the bonds are redeemed in cash on maturity. The bonds are issued by the RBI on behalf of the Government of India.