Sovereign Gold Bond 2016 Series II to mature on March 28 with 126% gains; check details
Upstox
2 min read • Updated: March 27, 2024, 3:08 PM
Summary
Sovereign Gold Bond (SGB) 2016 Series II final redemption price will be ₹6,601 per unit, reflecting a gain of 126% for investors upon maturity. It had an initial issue price of ₹2,916 per gram.
Sovereign Gold Bonds (SGBs) 2016 Series II will mature on Thursday, March 28 (as March 29, 2024 is a holiday), the Reserve Bank of India has announced. The SGB 2016-II is an eight-year bond that was launched on March 29, 2016, with an initial issue price of ₹2,916 per gram.
The final redemption price of the SGB will be ₹6,601 per unit, reflecting a gain of 126% for investors upon maturity.
The SGB redemption price is based on the simple average of the closing price of 999 purity gold for the week of March 18-22, as per the India Bullion and Jewellers Association Ltd (IBJA).
Sovereign Gold Bond 2016 Series I had matured on February 8, 2024. The eight-year bond, which launched at ₹2,600 per gram, matured with 141% gains at ₹6,271 for each SGB unit.
What is a Sovereign Gold Bond?
SGBs are government securities denominated in grams of gold and serve as an alternative to physical gold. As per the RBI, the issue price has to be paid in cash by the investors, and the SGBs will be redeemed in cash on maturity. It is issued by the RBI on behalf of the Government of India.
“The Bonds bear interest at the rate of 2.50 per cent (fixed rate) per annum on the amount of initial investment. Interest will be credited semi-annually to the bank account of the investor and the last interest will be payable on maturity along with the principal,” the central bank said.
Who is eligible to invest in SGB?
"Persons resident in India as defined under the Foreign Exchange Management Act (FEMA), 1999 are eligible to invest in Sovereign Gold Bond," RBI stated. Eligible investors include individuals, Hindu Undivided Family (HUF), trusts, charitable institutions and universities.
The minimum investment in the SGB is one gram, and the maximum limit is four kg for individuals, four kg for HUF, and 20 kg for trusts and similar institutions.
The authorised agencies selling the SGBs are offices and branches of nationalised banks, private banks, scheduled foreign banks, the Stock Holding Corporation of India Ltd (SHCIL), designated post offices and the stock exchanges directly or through their agents.