Sovereign Gold Bond 2017-18 Series-V Matures: Investors Fetch Over 300% Return

The Reserve Bank of India (RBI) has set the final redemption price for the Sovereign Gold Bond (SGB) 2017-18 Series-V, maturing on October 30, 2025, at ₹11,992 per gram. This price is derived from the simple average of gold prices of 999 purity for three business days prior to maturity. Investors who purchased this series in 2017 at ₹2,971 per gram are looking at an impressive return of around 304% over the eight-year period, not including the 2.5% annual interest already paid. The redemption is automatic, with proceeds credited directly to the investor's bank account. The SGB scheme, launched by the Government of India and managed by the RBI, aims to reduce physical gold demand and channel savings into financial instruments. It has successfully mobilized significant amounts of gold, though rising global gold prices are increasing the government's borrowing costs associated with these bonds due to their link to gold rates.

Impact This news is highly relevant for investors who hold or are considering holding SGBs, highlighting the potential for substantial returns linked to gold price appreciation. It also provides insight into the performance of government debt instruments tied to commodities. Rating: 8/10.

Terms and Meanings: Sovereign Gold Bond (SGB): A government-issued bond denominated in grams of gold. It acts as an alternative to holding physical gold and is backed by the government. Redemption Price: The price at which a bond or security is bought back or repaid at maturity. Maturity: The date on which a debt instrument, such as a bond, becomes due for repayment. India Bullion and Jewellers Association (IBJA): An apex body representing the organized sector of the Indian bullion and jewellery industry, which publishes benchmark gold prices. Tranche: A portion of an offering, such as bonds or stocks, that is distributed at a specific time.