Premature Redemption Of Sovereign Gold Bonds Series V-Issue 2019 Due Today
The redemption price for these bonds is set at Rs 9,069 per unit
The Reserve Bank of India has announced that the premature redemption of the Sovereign Gold Bond 2019-20 Series V, issued on October 15, 2019, is due today, April 15.
Investors who hold these bonds can redeem them earlier than the original maturity date, providing an opportunity for liquidity.
The redemption price for these bonds is set at Rs 9,069 per unit, based on the simple average of the closing gold prices of 999 purity over the previous three business days, as published by the India Bullion and Jewellers Association Ltd (IBJA).
This price calculation includes the closing gold prices on April 8, April 9, and April 11.
This early redemption option aligns with the interest payment date and offers investors flexibility in managing their investments.
The Sovereign Gold Bond (SGB) Scheme allows for the premature redemption of gold bonds after the fifth year from the date of issue. This option is available on the interest payment dates, providing investors an opportunity to access liquidity before the bonds reach their full maturity.
By allowing early redemption, the scheme ensures that investors can benefit from favourable market conditions or address urgent financial requirements without having to wait for the full term of the bond.
The full term for an SGB is eight years from the date of issue. If investors choose to hold the bonds until maturity, they will receive the redemption amount based on the prevailing gold price at that time. The interest on these bonds is paid semi-annually, providing a regular income stream in addition to the potential capital appreciation from gold price movements.
