What is the premature redemption price for RBI's Sovereign Gold Bond?
Synopsis
The Reserve Bank of India has revealed the premature redemption price for the Sovereign Gold Bond 2017-18 Series-XIII, set at Rs 13,563 per gram. This announcement highlights the bond's impressive returns, the benefits of government-backed securities, and the factors influencing gold prices globally. Stay informed about the financial trends affecting your investments.
Key Takeaways
Premature redemption price: Rs 13,563 per gram.
Initial issue price: Rs 2,866 per gram.
Return on investment: 381.6 percent.
Annual interest: 2.5 percent, paid semi-annually.
Gold bonds provide a digital alternative to physical gold.
New Delhi, Dec 26 (NationPress) The Reserve Bank of India (RBI) has set the price for the premature redemption of the Sovereign Gold Bond (SGB) 2017-18 Series-XIII, which is due this Friday. Investors wishing to redeem their SGB 2017-18 Series-XIII, initially issued on December 26, 2017, can do so at a price of Rs 13,563 per gram.
Typically, these bonds come with an eight-year maturity period, but investors have the option for premature redemption starting from the fifth year.
Initially, the SGB was issued at Rs 2,866 per gram without any discount, yielding a remarkable 381.6 percent absolute simple return.
Additionally, investors benefit from a 2.5 percent annual interest paid out semi-annually, enhancing the overall effective yield. The final redemption price is determined by the simple average of the closing price of gold with 999 purity over the preceding three business days.
The SGBs are government-backed securities measured in grams of gold, providing a digital alternative to physical gold while offering returns based on price appreciation and semi-annual interest. By holding SGBs until maturity or the premature redemption date, investors can also avoid capital gains taxes.
The returns from these bonds reflect the performance of gold over the past five years, influenced by factors such as aggressive central bank purchases, anticipated US Federal Reserve rate cuts, US tariff concerns, geopolitical issues, and strong inflows into gold and silver ETFs.
Experts anticipate a further rise in gold prices due to ongoing geopolitical tensions and potential threats to the US dollar's status as the world's reserve currency.
In international markets, the spot gold price increased by over 0.5 percent, reaching $4,501.44 per ounce on Friday, following a peak of $4,530.60. The escalating tensions between the US and Venezuela are significant contributors to the upward trend in gold prices.
Market analysts are foreseeing two quarter-point interest rate cuts by the Federal Reserve in 2026, especially as inflation eases and labor market conditions weaken, compounded by safe-haven demand arising from increasing geopolitical tensions.
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Point of View
It's vital to recognize the impact of RBI's announcement regarding the Sovereign Gold Bond. This development not only reflects the dynamics within the gold market but also underscores a growing interest in alternative investment strategies among Indian investors. With returns that significantly outpace traditional savings, SGBs present a compelling case for those looking to diversify their portfolios.
NationPress
20 Jun 2026
Frequently Asked Questions
What is the price for premature redemption of the SGB?
The premature redemption price for the Sovereign Gold Bond 2017-18 Series-XIII is Rs 13,563 per gram.
What is the maturity period for SGBs?
SGBs typically have an eight-year maturity period, but investors can redeem them prematurely from the fifth year onwards.
What returns can investors expect from SGBs?
Investors can expect a return of 381.6 percent and an additional 2.5 percent annual interest paid semi-annually.
Are SGBs subject to capital gains tax?
Investors can avoid capital gains taxes by holding SGBs until maturity or the premature redemption date.
What factors are influencing gold prices currently?
Gold prices are influenced by geopolitical tensions, expectations of US Fed rate cuts, and strong demand in the market.
