RBI Sets Final Price for SGB 2017–18 Series I: Investors Celebrate 221% Gains

The Reserve Bank of India (RBI) has set the final redemption price for the Sovereign Gold Bond (SGB) 2017-18 Series I at Rs 9,486 per unit. This amount is payable on May 9, 2025. Investors will receive this tax-free maturity amount along with an annual interest of 2.5%. The SGB was initially issued in May 2017 and matures after eight years.

Gold prices have surged recently, reaching Rs 1 lakh per 10 grams in some cities. This increase has significantly benefited holders of the SGB 2017-18 Series I. The bond's final redemption date is set for May 9, 2025, marking eight years since its issuance.

Final Redemption Price Calculation

The RBI's press release on May 2, 2025, detailed that the final redemption price is based on the average closing gold price from April 28 to May 2, 2025. The calculation uses the simple average of gold prices of 999 purity over three working days as published by the India Bullion and Jewellers Association Limited.

When first issued in May 2017, the SGB's price was Rs 2,951 per gram. Online buyers received a Rs 50 discount, making their effective purchase price Rs 2,901 per gram. This initial investment has grown substantially over eight years.

Substantial Returns for Investors

Investors in the SGB have seen a remarkable return of approximately 221% over eight years without factoring in interest earnings. For instance, an investment of Rs 1,47,550 for acquiring 50 grams of gold would yield Rs 4,74,300 at maturity based on the final redemption price.

Sovereign Gold Bonds are government securities issued by the RBI on behalf of the Indian government. They offer an alternative to physical gold holdings and provide periodic interest payments to investors.

Understanding Sovereign Gold Bonds

SGBs are denominated in grams of gold and serve as a secure investment option backed by government assurance. They allow investors to benefit from gold price appreciation without holding physical gold.

Investing in SGBs carries some risk if gold market prices fall; however, investors retain their purchased units regardless of market fluctuations. Eligible investors include individuals residing in India under FEMA guidelines and entities like trusts and universities.

Eligibility and Investment Details

Joint holdings are permitted for SGB investments. Minors can also invest through a guardian's application on their behalf. These bonds cater to various investor categories while providing a safe investment avenue.

The maturity proceeds from these bonds are exempt from tax liabilities, enhancing their appeal as a long-term investment choice for those seeking returns linked to gold prices without direct exposure to physical assets.