SGB 2017-18 Series Investors To Pocket Over 221 Per Cent Returns - Check Details

SGB 2025: Gold has given stellar returns to investors in 2025 so far. The surge in gold prices has also benefitted those individuals who have invested in Sovereign Gold Bonds (SGB) in recent years.

Sovereign Gold Bonds (SGBs) are issued by the apex bank in the form of government securities. These securities are denominated in grams and can provide an alternative to investing in physical gold.

SGB 2017-18 Series I Maturity

On May 2, the Reserve Bank of India (RBI) announced its final redemption price for SGB 2017-18 Series I. Notably the date for the final redemption is May 9, 2025. SGBs are repaid eight years after the date of issue, since the SGB 2017-18 Series I were issued in May 2017 the final redemption date for the tranche will be May 9, 2025.

With gold touching a historic all-time high of Rs 1 lakh for 10 grams, SGB investors are set to rake in big profits. Here’s how much money SGB 2017-18 Series investors are expected to gain on May 9:

How Much Will SGB 2017-18 Series I Investors Gain

The Reserve Bank of India has fixed the final redemption price to be Rs 9486 per unit of the SGB based. On the other hand, the issue price for the SGB 2017-18 Series I was set at Rs. 2951 per gram. Those investors who invested in SGB online will be eligible for a discount of Rs 50 on the issue price. Thus the applicable issue price for those investors would then become Rs 2901 per gram.

Thus, investors who purchased a minimum of one unit offline would gain Rs 6,535 (Rs 9486 - Rs 2951) upon redemption and on the other hand, online investors would gain Rs 6,585. The returns for offline investors would be 221.45 per cent, and online investors would gain nearly 227 per cent. Apart from the gains made on redemption, investments in SGB also accrue 2.5 per cent interest per annum. Notably, the amount which will be received by SGB investors upon maturity will be tax-exempt.

How Is Redemption Price Determined

SGB’s final redemption price is determined on the basis of the average or mean of the closing price of gold of 999 purity for three working days of the week prior to the day of redemption (Monday to Friday), which is released by India Bullion and Jewellers Association Ltd (IBJA).

Notably, the current price was determined by calculating the simple average of the closing gold price of 999 purity between April 28 and May 02.

To conclude, just like any other investment, investing in SGBs is prone to the risk of capital loss in case the price of physical gold falls. All investors who are residents of India, as per the Foreign Exchange Management Act (FEMA) 1999, can invest in SGB. Some common examples of eligible investors include individuals, Hindu Undivided Families, Trusts and even charitable institutions.