RBI Approves Premature Redemption for SGB Series III with Over 340% Gain

The Reserve Bank of India (RBI) has approved premature redemption for the Sovereign Gold Bond (SGB) 2019-20 Series III, allowing investors to cash out with a significant gain. The RBI set the redemption price at Rs 15,310 per unit, more than four times the original issue price of Rs 3,449 per gram.

For SGB investors who purchased units online on August 14, 2019, this means an absolute gain of around Rs 11,861 per unit or a 343.9% return over seven years. The RBI calculates the redemption price based on the simple average of closing gold prices for the three business days preceding the redemption date.

Gold and silver prices declined on Friday amid heightened geopolitical uncertainty following reports that the US could impose economic measures against Iran. However, SGB investors who held onto their units will be rewarded with substantial returns, making it an attractive option for long-term investment.