This gold bond turns Rs 1L investment into Rs 3.94L
The Reserve Bank of India (RBI) has announced the premature redemption price for the SGB 2019-20 Series V bonds, issued on October 15, 2019. Investors can redeem these bonds early from October 15, 2026. As per the RBI statement, the premature redemption option is available after the fifth year since the issue date.
To calculate the redemption value of the SGB, the RBI uses the simple average closing price of 999-purity gold for the preceding three working days. For the SGB 2019-20 Series V, the premature redemption price is set at Rs 14,725 per unit, based on the average gold price for October 12, 13, and 14, 2026.
Investors who opt for premature redemption on October 15, 2026, will receive Rs 14,725 for each unit of the SGB. The bonds were initially issued at Rs 3,738 per gram. This results in an absolute return of approximately 294% on the redemption date, calculated as Rs 10,987 (14,725 - 3,738) per gram. In percentage terms, the absolute return is around 293.93%.
Thus, an investment of Rs 1 lakh in this SGB would grow to approximately Rs 3.94 lakh by October 15, 2026, excluding the interest earned during the holding period.
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