The Reserve Bank of India (RBI) has declared the final redemption price for the Sovereign Gold Bond (SGB) 2016-17 Series IV, which is due for redemption today, March 17, 2025.
SGBs were repayable after eight years from the issue date, making the final redemption date March 17, 2025.
Final redemption price
The final redemption price for the SGB 2016-17 Series IV has been set at Rs 8,634 per gram. This price is based on the simple average closing gold price for the three business days—March 11, March 12, and March 13, 2025, ET reported.
The Sovereign Gold Bond (SGB) 2016-17 Series IV was issued on March 17, 2017, at an issue price of Rs 2,943 per gram, including a Rs 50 discount for online applicants. With the final redemption price of Rs 8,634 per gram, investors have made an impressive 193% return over eight years, excluding the interest component.
In addition to capital appreciation, SGB holders also earned a fixed 2.50% annual interest, paid semi-annually (without compounding).
One of the key advantages of SGBs is that they are exempt from capital gains tax if held until maturity. This means that the entire appreciation in value is tax-free for investors.
Calculation of final redemption price
The final redemption price of Rs 8,634 per gram was determined by calculating the average closing price of gold during the period from March 10 to March 13, 2025, excluding the March 14, 2025 holiday.
What are Sovereign Gold Bonds (SGBs)?
Sovereign Gold Bonds are government securities issued by the RBI on behalf of the Indian government. Denominated in grams of gold, these bonds provide an alternative to physical gold investment and offer periodic interest to investors.
SGBs are available to Indian residents as defined under the Foreign Exchange Management Act, 1999. Eligible investors include individuals, Hindu Undivided Families (HUFs), trusts, universities, and charitable institutions. Even if an individual changes their residential status from resident to non-resident, they can continue to hold SGBs until early redemption or maturity.
SGBs are sold through various authorized agencies, including nationalized banks, scheduled private banks, scheduled foreign banks, designated post offices, the Stock Holding Corporation of India Ltd. (SHCIL), and stock exchanges, either directly or through their agents.
Redemption process for SGBs
One month before maturity, investors will be notified about the upcoming redemption. On the maturity date, the proceeds will be credited to the investor’s registered bank account. Investors should promptly update their bank account or contact details with the bank or SHCIL if there are any changes before maturity.
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