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Through the Gold Monetisation Scheme (GMS), you can deposit gold in any form, such as jewellery, coins, or bars, at authorised banks, where it is refined at Collection and Purity Testing Centres (CPTCs) before being converted into standard tradable gold bars, ensuring liquidity.

You earn interest on your deposit, and at maturity, you can choose to receive either the gold or its cash equivalent. This scheme helps you make your idle gold productive while contributing to the economy and earning returns on your assets.

Understanding How the Gold Monetisation Scheme Works

This scheme evolved from earlier gold deposit initiatives and allows you to deposit your idle gold for a fixed period. Currently, only Short Term Bank Deposits (STBD) are available, with a tenure ranging from 1 to 3 years.

Similar to a bank deposit, the gold accrues interest while being refined and mobilised. At maturity, you can opt to receive your returns either in gold or in the Indian Rupee equivalent. You may decide this at the time of making the deposit.

Key Features and Benefits of the Gold Deposit Scheme

This scheme offers a secure and rewarding way to earn returns on your idle gold. Here are its key features and benefits:

  • Additional Source of Income

You can earn interest on your deposits, creating an additional stream of income while making idle gold productive.

  • Transparency

Gold is tested at authorised CPTCs in the depositor’s presence, ensuring accurate valuation and complete transparency.

  • Financial Inclusion

By depositing your idle gold, you can convert physical assets into interest-bearing financial instruments. This can help mobilise household gold and put it to productive use within the economy.

  • Gold Assets Mobilisation

The scheme helps mobilise gold held by households, institutions, and trusts, reducing idle holdings and contributing to the financial ecosystem.

  • Tax Exemption

The interest income and capital gains from the scheme are exempt from income tax and capital gains tax, as per current income tax laws. This offers you a financial advantage.

  • Flexible Redemption

At the time of deposit, you can choose to redeem the principal in either standard gold bars or the Indian Rupee equivalent. 

  • Premature Withdrawal

Premature withdrawal or early closure is permitted after one year, subject to penalties and bank-specific terms.

Eligibility Criteria and Documentation for the Gold Monetisation Scheme

To be eligible for this scheme, you are required to meet the following requirements and provide the necessary documents. 

  • Residency: Indian resident

  • Applicant type: Eligible categories include:

    • Individuals (single or joint) 

    • Hindu Undivided Family (HUF)

    • Companies 

    • Trusts

    • Proprietorship and partnership firms

    • Charitable institutions

    • Central or state government

    • Any entity owned by the state or central government

  • Minimum Deposit: A deposit of at least 10 grams of raw gold is to be made in either bars, coins, or jewellery (excluding stones and other metals)

  • Purity Testing: Your gold will be verified for purity at authorised CPTCs in your presence

Required Documents

  • Gold Deposit Application Form: Duly filled and signed by the depositor(s)

  • KYC Documents: As per the requirements of the designated bank (e.g., PAN, Aadhaar, proof of address)

Types of Gold Deposit Under the Gold Monetisation Scheme

Earlier, the scheme also included Medium-Term (5–7 years) and Long-Term (12–15 years) deposits. However, these options have been discontinued since 26 March 2025. The Gold Monetisation Scheme currently only offers Short Term Bank Deposits (STBD), designed to mobilise idle gold while earning interest.

Short Term Bank Deposit (STBD)

  • Duration: 1-3 years

  • Minimum Lock-in Period: 1 year

  • Applicable Interest Rate: Determined by the bank and subject to change

  • Interest Payment Frequency: As decided by the bank

This scheme provides flexibility, catering to different investment horizons and interest preferences.

DISCLAIMER

The information and suggestions provided by BFDL hereinabove is related to the Non-Partnered Banks/ NBFCs and is just for the purpose of information and under no circumstances the information provided hereinabove is intended to be source of advice or recommending any financial advice or endorsement of any sort. 

The information including interest rates or fees, loan amount and other charges with regard to any product, provided on this website is gathered through publicly available sources over the internet and is considered as accurate and reliable to the best of our knowledge. BFDL disclaims any responsibility or liability regarding inaccuracies, omissions, mistakes etc. as well as offers by the Non-Partnered Banks or NBFCs. The use of information set out is entirely at the User’s own risk and User should exercise due care prior taking of any decision, on the basis of information mentioned hereinabove. You are advised to visit/ contact the respective Banks/ NBFCs to verify the information before making any application or opening an account. Further, BFDL does not undertake any responsibility or liability to update this information. YOU ARE SOLELY RESPONSIBLE FOR ANY LIABILITY OR DAMAGE YOU INCUR THROUGH ACCESS TO OR USE OF THE SITE OR SUCH INFORMATION OR MATERIALS EXCEPT WHERE THE LAWS AND REGULATIONS OF A PARTICULAR JURISDICTION CONCERNING WARRANTIES CANNOT BE WAIVED. Additionally, display of any trademarks, tradenames, logo and other subject matters of intellectual property owners. Display of such Intellectual Property along with the related product information does not imply BFDL’s partnership with the owner of the Intellectual Property of such products. 

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Frequently Asked Questions

What is the interest rate on gold deposits?

The interest rate on STBDs is set by individual banks. For example, SBI offers between 0.50% to 0.60% per annum, depending on the tenure.

What is the minimum investment in a Gold Deposit Scheme?

You can start with a minimum of 10 grams of raw gold. It can be in the form of bars, coins, or jewellery, excluding stones or other metals. There is no maximum limit.

In what form will a depositor get back their gold on maturity?

You can choose to redeem your deposit either as physical gold or as its cash equivalent in Indian Rupees.

Can I withdraw the deposit prematurely?

Yes, but only after a minimum lock-in period of 1 year. Any early withdrawal rules, penalties, or conditions are determined by the bank where you opened your deposit. You can check them before you proceed.

What is the minimum and maximum tenure for the deposit?

The Short Term Bank Deposit allows a tenure of 1 to 3 years, as determined by the bank. Interest payments and maturity options depend on the bank’s terms.

When does the bank issue the Gold Deposit Certificate to the customer?

Once your gold is deposited and processed into tradable gold bars, the bank will issue a Gold Deposit Certificate. This certificate reflects the quantity of gold (up to three decimals) and its purity (995 fineness) and may be sent via courier or registered e-mail.

What are the RBI rules for the gold scheme?

The Reserve Bank of India mandates that all gold deposited must meet purity standards and be processed through authorised CPTCs. The interest you earn is calculated based on the value of gold at the time of deposit. Detailed rules are provided in the gold scheme guidelines issued by the Reserve Bank of India.

What happens to your gold jewellery in this scheme?

Your jewellery is refined and converted into 995-fineness gold bars. The weight of the refined gold is credited to your deposit account, ensuring accurate accounting.

What is the minimum and maximum deposit amount?

Deposits can be made with a minimum of 10 grams of gold (jewellery, coins, bars). After testing and refining, the gold is converted into 995-fineness bars for credit to the deposit account.

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