The Reserve Bank of India (RBI) has announced the final redemption price for the Sovereign Gold Bond (SGB) 2017-18 Series-IV, set to mature on October 23, 2025, at ₹12,704 per gram of gold. The redemption proceeds will be credited directly to investors’ bank accounts linked to the depository or bank branch from which the bonds were originally purchased.
The redemption price has been calculated using the simple average of the closing prices of 999-purity gold published by the India Bullion and Jewellers Association (IBJA) for the three business days preceding the redemption date. This approach ensures that investors receive a fair and transparent market-linked value for their gold holdings, reflecting prevailing market conditions at the time of maturity.
Issued on October 23, 2017, the Series-IV tranche of the 2017-18 Sovereign Gold Bond scheme completes its eight-year maturity cycle this week. The scheme, launched by the Government of India in 2015, was designed to offer an alternative to physical gold investment, enabling investors to gain exposure to gold in dematerialized form while earning additional returns.
Unlike physical gold, the SGBs offer interest income at a fixed rate, currently 2.5% per annum, paid semi-annually, along with potential capital gains linked to fluctuations in gold prices. This dual benefit makes SGBs an attractive option for investors looking to participate in the long-term appreciation of gold without facing the challenges of storage, security, and purity concerns associated with physical holdings.
Over the years, the SGB scheme has gained popularity among both retail and institutional investors, providing a safe, government-backed avenue to invest in gold while offering liquidity and tradability on stock exchanges. The bonds also qualify for capital gains tax exemption upon redemption, adding a tax-efficient dimension to investment planning.
The RBI issues SGBs on behalf of the Government of India as part of its market borrowing program, aiming to mobilize funds while providing investors with a secure and profitable investment linked to a globally recognized safe-haven asset. The bonds are available in multiples of one gram of gold, and investors can subscribe either directly through banks, post offices, and stock exchanges or via digital platforms offered by participating financial institutions.
As the 2017-18 Series-IV tranche reaches maturity, investors are expected to receive their redemption proceeds promptly, reflecting the RBI’s commitment to efficient settlement and transparency. With gold prices remaining elevated over the past year amid global economic uncertainties, the redemption provides investors an opportunity to realize substantial returns on their eight-year investment, combining market-linked appreciation with accrued interest.
The SGB program continues to play a key role in promoting financial savings in India, reducing reliance on physical gold imports, and channeling household savings into productive avenues, reinforcing the government’s broader economic objectives.
Disclaimer:
This article is intended solely for educational and informational purposes. The securities or companies mentioned are provided as examples and should not be considered as recommendations. Nothing contained herein constitutes personal financial advice or investment recommendations. Readers are advised to conduct their own research and consult a qualified financial advisor before making any investment decisions.
Investments in securities markets are subject to market risks. Please read all related documents carefully before investing.