Investors who boughtSovereign Gold Bond(SGB) 2016-17 Series IV have hit a jackpot. A gram of gold bought at Rs 2,943 during the issue period at March 2017 is worth Rs 8,624 per gram now, which translates into 3x gains or a whopping 193% profit over the issue price. The final redemption date of the above tranche is Monday March 17, 2025.

The redemption price of the SGB is based on the simple average of closing price of gold of 999 purity of the week (Monday-Friday), preceding the date of redemption, as published by the India Bullion and Jewellers Association (IBJA).

Accordingly, the redemption price is based on the simple average of closing gold price for the week March 10 -13, 2025.

There will also be a window open for premature redemption of SGB 2019-20 Series IV, the issue date for which is September 17, 2019. The due date of premature redemption of the above tranche has been fixed on March 17, 2025, a Thursday release by the Reserve Bank of India (RBI) said.

The redemption price for premature redemption is Rs 8,634 per gram based on the simple average of closing gold price for the three business days i.e., March 11, March 12, and March 13, 2025.

SGBs are government securities denominated in grams of gold. The bonds are redeemed in cash on maturity. The SGB is issued by the RBI on behalf of the Government of India and it carries a sovereign guarantee. It can be purchased when RBI comes out with an issue.

The advantage of SGB over other forms of Gold is on multiple counts. Apart from capital appreciation, SGBs offer a 2.5% interest on the capital appreciation, Personal Finance expert Jitendra Solanki. There is no capital gains tax if one remains invested for 8 years, he added. SGBs are highly liquid and are traded on the exchanges, Solanki further said. There is a sovereign guarantee and no danger of a default. Moreover, there is no expense on managing it, the expert said.

The last SGB issue opened to the public for subscription was on February 12, 2024, and it closed on February 16, 2024. The SGB scheme was announced as a part of the Union Budget 2015-16.

Gold has been on fire as it hit a fresh life time high of Rs 88,310 per 10 gram on Friday. In the international market, gold breached the $3,000 per troy ounce mark.

So far this year, gold has appreciated by over 14% or nearly Rs 11,000 on the MCX.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)