The Reserve Bank of India (RBI) on June 14, 2024, announced the premature redemption price of Sovereign Gold Bond 2017-18 Series XII issued on December 18, 2017. The premature redemption date falls on June 18, 2024. As per the regulations of the Sovereign Gold Bond Scheme, premature withdrawal is allowed once your investment tenure is completed five years from the date of purchase. Accordingly, the next premature redemption date for Sovereign Gold Bond 2017-18 Series XII is scheduled for June 18, 2024. These bonds have a maturity tenure of 8 years and offer a fixed interest rate of 2.50 per cent, paid bi-annually till maturity.
The redemption price for this SGB is Rs 7,165, calculated based on the simple average of the closing gold price (999 purity) on the three previous business days from the redemption date, as reported by the India Bullion and Jewellers Association Ltd (IBJA).
To make a premature withdrawal of an SGB, a request must be submitted to the regional office (RO) or depository at least 10 days before the interest payment falls due. The request will be reviewed for accuracy and have to be submitted to the RBI via the E-Kuber Portal at least four days before the interest due date, as per the RBI release.
For investments held outside of a demat account, premature redemption procedures can be processed through a bank, SHCIL, post office, or agent if the investor applies within a window of 30 days but at a minimum of one day before the scheduled premature redemption date.
Historically RBI used to release four tranches of SGBs in a fiscal year with mostly June seeing the first issuance. In the financial year 2023–24, the third week of June saw the first issuance. Investors invested Rs 27,031 crore in SGBs buying 44.34 tonnes worth of gold, as much as four times compared to their investment in FY 2022-23, as per the recently released annual report of the Reserve Bank. Previously, in FY 2022-23, RBI released two SGB tranches in June and August, followed by two more tranches in December and March 2023. Nevertheless, RBI used to make many more issuances 10 issuances per financial year.
Historically gold has shown high volatility and poor returns if we take its returns of the last ten years compared to other conservative investment options. So experts suggest retail investors only invest up to five to 10 per cent of their portfolio in SGB or digital gold and stay away from physical gold.
