Revenue Secretary Sanjay Malhotra announced recently that the sovereign gold bonds will get at least 12 percent total return, including interest, for the investors despite the Union budget cutting customs duties on gold and silver to 6 percent from 15 percent.
Government Guarantees At Least 12% Total Return on Sovereign Gold Bonds Despite Lowered Gold Import Duties
At the post-Budget session at the PHD Chamber of Commerce and Industry, he said that “I want to assure that despite the rate reduction in gold import duty, the sovereign gold bonds nearing final redemption will still get at least 12 percent total return, if not 12.7-12.8 percent. Even 12 percent return is not low”.
A senior government official said that till now, the investors have received approximately 9-11 percent return per annum and on top of that an interest of 2.5 %.
In the month of July 2022, due to the prevailing circumstances, the import duty on gold was increased including a worsening current account deficit (CAD) at that time as a measure to curb imports.
“We are now in a comfortable position in the current account deficit,” he said.
Sovereign Gold Bonds 2016-17 Series 1 Set for Redemption in August 2024: Key Details and Future Outlook
With the redemption expected in the first week of August 2024, the Investors in the Sovereign Gold Bond (SGB) scheme 2016-17 – Series 1, which was issued in August 2016, are approaching the end of their bond’s term. Offering an annual interest rate of 2.75%, the initial price of the bond was Rs 3,119 per bond. It shall be on the basis of the average closing price of gold over the three days before redemption, that the redemption value will depend.
As of today, the SGB scheme offers an interest rate of 2.5% per year, paid semi-annually. The government has not issued new SGBs since February and may reduce or end the scheme due to high costs.
