Latest news with #SGB
News18
2 days ago
- Business
- News18
Sovereign Gold Bond Delivers 205% Return: RBI Announces Redemption Price Of This SGB
Last Updated: The Reserve Bank of India (RBI) has declared the premature redemption price for the Sovereign Gold Bond (SGB) 2018-19 Series-V The Reserve Bank of India (RBI) has declared the premature redemption price for the Sovereign Gold Bond (SGB) 2018-19 Series-V, which is due for early redemption on Tuesday, July 22, 2025. While SGBs have a maturity period of eight years, investors are allowed to redeem them prematurely after five years from the date of issuance, only on coupon payment dates. According to the RBI press release dated July 21, 2025, the redemption price is determined using the simple average of the closing gold prices (999 purity) for the previous three business days prior to the redemption date. These prices are published by the India Bullion and Jewellers Association Ltd (IBJA). What Is the Redemption Price for SGB 2018-19 Series-V? The redemption price for the SGB 2018-19 Series-V, due on July 22, 2025, has been set at ₹9,820 per gram/unit, based on the gold price averages of July 17, 18, and 21, 2025. Returns on Premature Redemption The SGB 2018-19 Series-V was originally issued in January 2019 at a price of Rs 3,214 per gram. Therefore, the absolute gain on premature redemption is: Rs 9,820 (current redemption price) – Rs 3,214 (issue price) = Rs 6,606 per gram SGBs offer a fixed interest rate of 2.50% per annum on the initial investment amount. This interest is credited semi-annually to the investor's bank account. The final interest payment is made along with the principal at maturity or during premature redemption. What Are Sovereign Gold Bonds (SGBs)? SGBs are government securities denominated in grams of gold and act as a substitute for physical gold. Investors pay the issue price in cash and receive the redemption amount in cash. These bonds are issued by the RBI on behalf of the Government of India. Previous Redemption Announcement The RBI had earlier announced the redemption price for the SGB 2018-19 Series-IV, which was due for premature redemption on July 14, 2025. Frequently Asked Questions (FAQs) on Sovereign Gold Bonds Can I redeem my gold bond anytime? No. While the bond has an 8-year maturity, early redemption is allowed only after 5 years from the issue date and only on coupon payment dates. The bonds are tradable on stock exchanges if held in demat form and can be transferred to eligible investors. How can I exit my SGB investment prematurely? Investors who wish to redeem early must approach the bank, SHCIL, Post Office, or agent 30 days before the coupon payment date. The request must be submitted at least one day prior to the coupon date. Proceeds will be credited to the investor's bank account registered at the time of bond purchase. view comments Disclaimer: Comments reflect users' views, not News18's. Please keep discussions respectful and constructive. Abusive, defamatory, or illegal comments will be removed. News18 may disable any comment at its discretion. By posting, you agree to our Terms of Use and Privacy Policy.
Time of India
2 days ago
- Business
- Time of India
SGB early redemption: Get 205% return on these Sovereign Gold Bonds; RBI announces premature redemption price
Soverign Gold Bond redemption: The Reserve Bank of India (RBI) has announced the early redemption value for Sovereign Gold Bonds (SGB) 2018-19 Series-V. Investors can opt for early redemption only after holding the bonds for five years from the issue date. Tired of too many ads? go ad free now According to RBI, the above mentioned SGB is up for early redemption on Tuesday, July 22, 2025. These gold bonds reach maturity after an 8-year period from their issue date. Sovereign Gold Bonds or SGBs are in essence government-backed securities that are measured in grams of gold. They serve as an alternative to investment in physical gold. Investors need to make cash payments for purchasing these bonds, and upon maturity, they receive cash settlements. The Government of India authorises the Reserve Bank of India to manage the issuance of these bonds. We take a look at the early redemption value, potential returns from choosing premature redemption, and other details as listed in an ET report: SGB 2018-19 Series-V Redemption Value For SGBs due for early redemption on July 22, 2025, the redemption value is set at Rs 9,820 per unit. This calculation considers the average closing gold prices over three business days: July 17, 2025, July 18, 2025, and July 21, 2025. Understanding SGB Redemption Price Calculation "The redemption price of SGB shall be based on the simple average of the closing gold price of 999 purity of the previous three business days from the date of redemption, as published by the India Bullion and Jewellers Association Ltd (IBJA),' says RBI in its July 21, 2025 release. Investment Returns Analysis The initial issue price of SGB 2018-19 Series-V in January 2019 was Rs 3214 per gram. The absolute gain amounts to Rs 6,606 (Rs 9,820 - Rs 3214), excluding interest earnings. Tired of too many ads? go ad free now This represents a substantial return of 205.56% on the investment. SGB Interest Payment Structure For investors Sovereign Gold Bonds mean a fixed annual interest of 2.50% on the principal investment amount. The interest payments are credited twice a year directly to the investor's bank account. The final interest crediting happens at maturity in addition to the principal amount. Is there flexibility to redeem SGBs before maturity? Whilst the bonds have an 8-year tenure, early redemption is permitted after five years from issuance on specified coupon payment dates. When held in demat format, these bonds can be traded on exchanges. Additionally, they are transferable to other qualified investors. What is the process for exiting an SGB investment? If you want to opt for early redemption, you have to contact your bank/SHCIL offices/Post Office/agent 30 days before to the coupon payment date. Early redemption requests are processed only if they ate submitted at least one day before the coupon payment date. The redemption amount is then transferred to the bank account specified during the bond application.
Time of India
2 days ago
- Business
- Time of India
205% return on Sovereign Gold Bonds: RBI announces redemption price of this SGB
How is SGB redemption price calculated? Academy Empower your mind, elevate your skills What is the redemption price of SGB 2018-19 Series-V? Returns on premature redemption of SGBs Interest payment on SGB What are Sovereign Gold Bonds (SGBs)? Important FAQs on SGBs Can I encash the gold bond at any time? Is premature redemption allowed? What do I have to do if I want to exit my SGB investment? The Reserve Bank of India (RBI) has announced the premature redemption price for Sovereign Gold Bonds (SGB) 2018-19 Series-V. The SGB is due for premature redemption on Tuesday, July 22, 2025. Gold bonds mature 8 years from the date of issuance, and premature redemption of SGBs is permitted only after the completion of the fifth year from the date of Wealth Online tells you the premature redemption price, the returns you will earn if you opt for premature redemption and other important to an RBI press release dated July 21, 2025, "The redemption price of SGB shall be based on the simple average of the closing gold price of 999 purity of the previous three business days from the date of redemption, as published by the India Bullion and Jewellers Association Ltd (IBJA)."The redemption price of Sovereign Gold Bonds due for premature redemption due on July 22, 2025, will be Rs 9,820 per unit of SGB based on the simple average of the closing gold price for the three business days i.e. July 17, 2025, July 18, 2025 and July 21, SGB 2018-19 Series-V, was issued at Rs 3214 per gram in January 2019. So, the absolute return comes to Rs 9,820 - Rs 3214 = Rs 6,606 (without factoring in the interest). In percentage terms, it comes to 205.56%Gold bonds offer an interest rate of 2.50% (fixed rate) per annum on the initial investment amount. Interest will be credited semi-annually to the investor's bank account, and the last interest payment will be made on maturity, along with the are government securities denominated in grams of gold. They are substitutes for holding physical gold. Investors must pay the issue price in cash, and the bonds will be redeemed in cash upon maturity. The Reserve Bank of India issues the bond on behalf of the Government of Reserve Bank of India (RBI) had announced the premature redemption price for Sovereign Gold Bonds (SGB) Series-IV which was due on July 14, the tenor of the bond is 8 years, early encashment/redemption of the bond is allowed after the fifth year from the date of issue on coupon payment dates. The bond will be tradable on exchanges if held in demat form. It can also be transferred to any other eligible case of premature redemption, investors can approach the concerned bank/SHCIL offices/Post Office/agent thirty days before the coupon payment date. Requests for premature redemption can only be entertained if the investor approaches the concerned bank/post office at least one day before the coupon payment date. The proceeds will be credited to the customer's bank account provided at the time of applying for the bond.
Time Business News
5 days ago
- Business
- Time Business News
Why A Loan Against SGB Is A Low-Risk Credit Facility?
With the rapid evolving financial scenario of the times, it's all about choosing the appropriate credit source to be safe and sound and secure financially. For most Indians, loans against securities are becoming the first choice with their lower cost and lesser risk. Of them, a loan against SGB is also an extremely clever and safe borrowing option. In this blog, we will inform you why a loan against SGB is a risk-free credit facility and how you can receive clear information, easy facts, and relevant tips. Whatever your need for money is – to settle some surprise bill, invest in a business, or accumulate your pool of liquidity, it is significant that you know how a gold bond loan functions so that you can make financially sound decisions. With this critique, you will find out how it stands in comparison to other types of loans and why it is the best for you. Let us see how loan against SGB is a good choice in India. Loan against SGB is taking cash loan on pledge of your Sovereign Gold Bonds in a bank. Sovereign Gold Bonds are being issued by government of India as a safe investment which provides return on gold price basis and above-and-beyond return of 2.5% per annum, half-yearly. With these bonds, you can get a loan without selling your gold investment. Banks and finance companies (NBFCs) give advances against such securities at market rates of interest, generally lower than unsecured advances like personal loans or credit card transactions. Interest rate, interest rate period, and loan-to-value (LTV) ratios vary but offer concession to the borrowers to raise their financial requirement. The best part of it is that you still own your gold bonds and enjoy liquidity at any point in time. Even disposing of the bonds might result in loss of future gains on appreciation. In case of a loan against gold bond, you repay the interest and principal in installments and your security is in your possession intact and maybe gaining value as well. Obtaining a loan against SGB has several benefits which make the credit product a low-risk, customer-friendly one — for the Indian middle class and salaried class, in particular. Gold bond loans carry much reduced interest charges than unsecured personal loans, typically 8% to 10% per annum. For instance, the rate of interest on loans against securities from Axis Bank can be as low as 8.50%. You won't be forced to sell your gold bonds and miss out on future appreciation of price or returns of fixed interest. Because you utilize the SGB as a guarantee, it remains with you, and you continue to get the 2.5% interest on it from the government. Usually, such loans carry free repayment tenors, usually between a few months and a few years. This allows customers to select the pattern most convenient to their cash flows, preventing defaults and tensions. Since there is scarce documentation and the bonds are physical or electronic, the loan can be disbursed quickly by banks. It is a big boon in emergency situations or when money is required urgently. Paying back such a loan in time creates a good credit rating, which makes future borrowing requirements at preferential rates. All of these advantages combined make a loan against sgb extremely attractive to risk-conscious investors who choose secured credit channels. The mere fact of Sovereign Gold Bonds offering security is a strong safeguard against risk for both lenders and borrowers, thus making loans against SGB one of the safest credit channels one can choose. Government-guaranteed securities: SGBs are issued and guaranteed by the Government of India, which is why the underlying asset has the highest credit quality. This largely reduces the risk of default in the collateral. Steady valuation: Gold is widely known throughout the world to appreciate in the long term and thus a secure investment. This minimizes the danger of unanticipated drainings of collateral value that makes banks nervous around riskier lending. Monitoring of loan-to-value ratio: Banks advance 75-90% of the prevailing market price of the gold bond, with adequate margin to service even when the price of gold goes down reasonably. Asset retention: The borrowers do not run the risk of losing their investment in case of default against unsecured loans, given there is no delay in repayment. There is minimal risk of seizure of assets on judicious borrowing and repayment. Rule simplicity: Government guarantee and real-time gold price valuation provide certainty on loan terms and pricing to the borrowers. Reduced burden of interest: The reduced interest charges compared to unsecured loans decrease defaults and financial pressure. The loan against SGB is hence a compromise between affordability to and security to both and one of the reasons why it is a low-risk credit product. To Indian household and consumer, it surprises to sail through loan options sea. Read a simple comparison to understand why loan against gold bond will usually be a preferred option. Factor Loan against SGB Personal Loan Loan against Gold Jewellery Collateral Supported by Sovereign Gold Bonds (paper or electronic form); no physical property involved. Unsecured; no property or pledge of asset involved. Physical gold ornaments or jewellery pledging involved. Interest Rate (Approx.) Typically 8% – 10%, varying with lender and term. Generally higher, 12% – 20%, varying with credit profile. Approximately 9% – 12%, varying with purity of gold and lenders' policy. Loan-to-Value (LTV) Up to 90% of market value of the bond. Does not exist since there is no collateral. Generally not in excess of 75% of the appraised value of the gold. Asset Risk Very low – the bond is government-guaranteed and is secure for the tenor of the loan. High – being an unsecured facility, there are greater probabilities of defaulting, usually on credit rating. Medium – risk of loss of or underpricing of physical gold product. Ownership Retention Yes – you still hold the SGB even when it is pledged. Not applicable – pledge of collateral does not hold. No – the lender holds the jewellery until full repayment. Repayment Flexibility High flexibility in foreclosure and low-penalty repayment. Moderate – typically EMI-based repayment with marginal prepayment facilities. Moderate – low flexibility but with potential charges or valuation traps. Speed of Loan Disbursement Quick – particularly if SGB is demat or electronic form. Quick – since often given online and with minimal documentation. Quick – once physical valuation of gold is completed. Gold jewelry loans, while being collateralized, have the risks of physical possession, valuation risks, and potential lower LTVs. SGBs eliminate all these because SGBs are paper or electronic government-insured bonds. Application against SGB is easy but needs to be done carefully in a few simple steps and advice to obtain the maximum out of your application and payment process. Eligibility confirmation: Banks and NBFCs will essentially ask you to hold valid Sovereign Gold Bonds in your name. Lender selection: Shortlist tenor, interest rate, processing charge, and customer service of top lenders like Bajaj Finance, Axis Bank, etc. Document submission: You may upload your SGB certificates or demat proof and your KYC documents. E-bonds make it easy. Sanction and release of loan: After authentication, the loan amount is credited in your account in time. Never borrow more than necessary: Be reasonable with your loan amount compared to your paying capacity to save yourself from tension. Understanding valuation process: SGB price varies based on market value of gold; borrowing on higher prices lowers LTV risk. Monitor gold prices: Monitor market movement to prudently time repayment or refinancing of the loan. Follow credit discipline: Early payment of EMI enhances your credit rating and hence future loan acceptability. Prudently utilize funds: Use the loan as a productive source of finance, not as a source of money for wanton expenditure. This risk-sensitive strategy allows you to get maximum mileage from your loan against gold bond without violating your finances. Loan against SGB is risk-free, customer-friendly loan facility for the Indian consumer looking for security and affordability. Govt.-guaranteed and gold value secured, it offers secure collateral, reduced interest rates, and simple repayment. Lower risk than unsecured loans or even loans against physical gold jewellery, loan against gold bond significantly reduces lender's as well as borrower's risks. For individuals with family expenses obligations, business requirements, or unforeseen incidents, this credit facility is a secured safety net without having to liquidate assets. Should you hold Sovereign Gold Bonds, their conversion to avail timely funds is an economic decision that preserves wealth and increases economic security. To make a smart decision, read your lender's terms and interest, anticipate repayment, and familiarize yourself with the worth of your SGB holdings. Borrowing against SGB is finally a milestone towards prudent credit management that protects your assets and meets your liquidity requirements. Read Other Blogs: How to identify professions that help others TIME BUSINESS NEWS
News18
13-07-2025
- Business
- News18
Investors Set To Earn Nearly 100% Return As SGB 2020-21 Series-IV Redemption Opens July 14
SGB Scheme Redemption: Investors holding Sovereign Gold Bond (SGB) 2020-21 Series-IV can opt for early redemption on July 14, 2025. The Reserve Bank of India (RBI) has fixed the redemption price at Rs 9,688 per gram. Sovereign Gold Bond (SGB) 2020-21 Series-IV was Issued at Rs 4,852 per gram in July 2020. The SGB 2020-21 Series-IV offers investors an absolute return of Rs 4,836 per gram over five years, translating to a 99.67% return on the principal amount. This doesn't include the additional 2.5 per cent interest on every six month.
