Sovereign Gold Bonds 2016 Series I to give 101% profit at maturity: Check final redemption date

As the first batch of Sovereign Gold Bonds (SGB) 2016 approaches maturity on Thursday, February 8, investors who chose to retain these bonds are poised to realise substantial gains. The Reserve Bank of India (RBI) has recently announced the final redemption price at ₹6,271 per unit of SGB, reflecting the simple average closing price of gold for the week of Jan 29-Feb 2, 2024, as per the SGB scheme guidelines.

The Sovereign Gold Bonds 2016-I, with an initial issue price of ₹3,119 per gram when launched in February 2016, will yield around 101% gain for investors upon maturity.

The interest on SGB is credited semi-annually to the investor's bank account, with the final interest payment due along with the principal at maturity.

Investors are provided with a one-month notice before the bond's maturity, and on the maturity date, the proceeds are credited to the registered bank account.

It is crucial for investors to promptly update any changes in account details with the bank/SHCIL/PO.

Sovereign Gold Bonds offer a unique advantage, allowing investors to capitalise on gold price fluctuations without the complexities associated with physical gold transactions.

Online purchasers enjoy a ₹50 per gram discount, providing greater flexibility.

Holding SGBs until maturity in the eighth year enables a 100% capital gains exemption for those who buy them on the secondary market.

Experts say that selling the SGB before the eighth year may incur Short-Term Capital Gains (STCG) if sold within three years and 20% Long-Term Capital Gains (LTCG) if sold between three to eight years.

However, holding until maturity in the eighth year qualifies for a 100% capital gains exemption.

Meanwhile, Sovereign Gold Bonds (2023-24 Series IV) will open for subscription for five trading days, from February 12 to February 16. The price for the issue will be declared by Reserve Bank of India (RBI) soon.

The SGBs, categorised as Government of India Stock under the Government Securities Act, 2006, offer investors an unique avenue for gold investment.

Upon subscription, investors will be furnished with a Certificate of Holding, and these bonds can be converted into demat form.