RBI Announces Redemption Price for Sovereign Gold Bonds

The RBI has set the redemption price for the final Sovereign Gold Bond (SGB) due on March 17, 2025, at ₹8,624 per unit. The price is based on the average gold price for the week of March 10-13, 2025. The SGBs 2016-17 Series IV are repayable on March 17, 2025, and the redemption price will be based on the simple average of closing gold prices for the week preceding the date of redemption.

The Reserve Bank of India (RBI) has announced the final redemption price for Sovereign Gold Bonds (SGBs) maturing on March 17, 2025 [1]. The redemption price is based on the average gold price for the week of March 10-13, 2025.

SGBs are a popular investment option for Indians, offering an alternative to holding physical gold. These bonds provide investors with fixed-income securities, denominated in grams of gold. The RBI acts as the issuing authority for these bonds on behalf of the government [1].

The final redemption price for the SGBs maturing in March 2025 will be determined using the simple average of the closing gold prices for the week preceding the redemption date. This method is in line with the guidelines provided by the RBI [1].

According to Business Today, the final redemption price for SGBs issued on August 5, 2016, was set at Rs 6,938 per gram, which was 122% higher than the issued price [1]. Although the final redemption price for the SGBs maturing in March 2025 is yet to be announced, investors can expect a similar level of appreciation, given the current trend in gold prices.

Investors who purchase SGBs at the issue price in cash receive interest at a rate of 2.75%, payable semi-annually on the initial investment amount [1]. Upon maturity, the bonds are redeemed for cash, and the final interest amount accumulated on the bonds is disbursed directly to the holder's bank account.

The RBI has designated March 17, 2025, as the final redemption date for the SGBs maturing in March 2025. It is worth noting that the redemption of these bonds is mandatory, unlike the optional redemption offered by the RBI at the end of the fifth year [1].

References:
[1] Business Today. Sovereign Gold Bonds: RBI fixes final redemption price at Rs 6938 for SGB August 2016 issue. August 3, 2024. https://www.businesstoday.in/personal-finance/investment/story/sovereign-gold-bonds-rbi-fixes-final-redemption-price-at-rs-6938-for-sgb-august-2016-issue-439986-2024-08-03