Check the Gold Deposit Scheme interest rate, types, lock-in periods and plan your investment!
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.
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.
This scheme offers a secure and rewarding way to earn returns on your idle gold. Here are its key features and benefits:
You can earn interest on your deposits, creating an additional stream of income while making idle gold productive.
Gold is tested at authorised CPTCs in the depositor’s presence, ensuring accurate valuation and complete transparency.
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.
The scheme helps mobilise gold held by households, institutions, and trusts, reducing idle holdings and contributing to the financial ecosystem.
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.
At the time of deposit, you can choose to redeem the principal in either standard gold bars or the Indian Rupee equivalent.
Premature withdrawal or early closure is permitted after one year, subject to penalties and bank-specific terms.
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
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)
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.
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.
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.
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.
You can choose to redeem your deposit either as physical gold or as its cash equivalent in Indian Rupees.
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.
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.
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.
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.
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.
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.