Investors in Sovereign Gold Bonds (SGB) have reason to cheer as the Reserve Bank of India (RBI) has announced a calendar for premature redemption of these bonds.
While SGBs typically have an 8-year tenure, investors now have the option to redeem them ahead of schedule, subject to specific conditions.
Here’s what you need to know about this exciting development.
Early Redemption Option
Sovereign Gold Bonds usually mature after 8 years, but investors can opt for early redemption after a minimum lock-in period of 5 years, providing greater flexibility for investors.
RBI’s Redemption Calendar
The RBI has unveiled a redemption calendar for different series of Sovereign Gold Bonds, allowing investors to plan their premature withdrawals. Here are the details:
- SGB 2017-18 Series III: Investors in this series can redeem their bonds between September 16, 2023, and October 6, 2023. These bonds were initially issued on October 16, 2017.
- SGB 2017-18 Series IV: Investors in this series have the option to redeem their bonds between September 23, 2023, and October 13, 2023. These bonds were issued on October 23, 2017.
- SGB 2017-18 Series V: For investors in this series, the redemption window is open between September 30, 2023, and October 20, 2023. These bonds were originally issued on October 30, 2017.
Redemption Process
Investors should note that the mentioned redemption dates are subject to change due to unscheduled holidays.
To redeem their bonds prematurely, investors need to follow the RBI’s redemption calendar and contact the relevant bank, SHCIL offices, post office, or an agent of a third party. This process should be initiated before the coupon date.
Attractive Interest Rates
Sovereign Gold Bonds offer an attractive feature with an annual interest rate of 2.5 percent, deposited into the investor’s bank account every six months.
However, it’s essential to remember that this interest income is taxable. On the positive side, the profit earned at the time of redemption is not subject to taxation.
Promoting Gold Investment
The government introduced Sovereign Gold Bonds to encourage people to invest in gold without the need for physical holdings.
Investors can start with a minimum investment of 1 gram and can go up to a maximum of 4 kg, making it a flexible and accessible investment option.
Investors are advised to stay informed about these redemption opportunities and consider their financial goals when deciding whether to redeem their Sovereign Gold Bonds prematurely.
