Sovereign Gold Bond premature withdrawal Oct 2022-March 2023: Know dates, early redemption rules (2024)

FAQs

What is the date of SGB premature redemption? ›

The Reserve Bank of India (RBI) issued a press release outlining the details of the Sovereign Gold Bond (SGB) tranches scheduled for premature redemption during April 2024 – September 2024, as well as a window for submitting requests for premature redemption.

The premature redemption price for Sovereign Gold Bond (SGB) 2016-17 Series II has been revealed by the Reserve Bank of India (RBI). The premature redemption will be done on March 30, 2024. The premature redemption rate for the same is Rs 6,601 per unit of sovereign gold bond (SGB).

Is premature redemption allowed? Though the tenor of the bond is 8 years, early encashment/redemption of the bond is allowed after 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 investor.

There is a specific annual deadline within which an SGB investor must apply for premature redemption after the completion of 5 years of investment. If the SGB is not tendered to the RBI within this deadline then the said SGB cannot be redeemed in the relevant year.

SGBs can be redeemed in two ways: premature redemption and redemption on maturity. SGBs can be redeemed prematurely after five years from the date of issue. In another case, SGBs can also be redeemed on maturity, which is eight years from the date of issue.

The final redemption amount, which is due on March 28, 2024, is Rs 6601 for each SGB unit.

Bonds are 100% tradable securities. This means that there is no lock-in on your bond investment. If you want to sell them before maturity, you can do so in the secondary market at market price(market price may vary from par-value).

You can cash in (redeem) your I bond after 12 months. However, if you cash in the bond in less than 5 years, you lose the last 3 months of interest. For example, if you cash in the bond after 18 months, you get the first 15 months of interest. See Cash in (redeem) an EE or I savings bond.

You can get your cash for an EE or I savings bond any time after you have owned it for 1 year.

Those who purchased SGBs online using a demat account can check the status by visiting the 'portfolio' or 'holding' section.

What is the risk of early redemption? ›

Early redemption risk

If a bond is redeemed early, the investor will not be able to obtain the expected return or will have to re-invest the proceeds and yields on other bonds in the market, usually at less favourable terms. Given this, callable bonds generally pay higher interest than non-callable bonds.

On the Seder night, we drink four cups of wine, corresponding to the four expressions of redemption — “I will bring you out”, “I will rescue you”, “I will redeem you” and “I will take you to me as a people.” These four stages correspond to four points in the Exodus.

A minimum redemption — a requirement that you have a certain amount of rewards on your credit card before cashing in — can make it difficult to get your money's worth on earned points, miles or cash back.

Investors who hold a bond to maturity (when it becomes due) get back the face value or "par value" of the bond. But investors who sell a bond before it matures may get a far different amount.

Sovereign gold bonds (SGBs) have a tenure of eight years. One month before maturity, investors are notified of the bond's maturity date. On the date of maturity, the maturity proceeds are credited to the bank account provided by the investor during the application process.

Here's what investors need to know about the liquidity of SGBs: Lock-in Period: Most SGBs come with a term of 8 years. However, an exit option is typically available from the fifth year. This means that for the initial years, liquidity can be a concern for investors who may need to exit their investments earlier.

Individuals, families, trusts, universities, and charitable organizations can invest in SGBs. SGBs come with a tenure of eight years. After five years, investors can request to withdraw early.