The Gold Deposit Scheme is an ideal investment option for you as an investor who intends to deposit idle gold in a financial institution or with jewellers. The scheme includes various options such as the Sovereign Gold Bond (SGB), the Indian Gold Coin Scheme (IGC), and the Gold Monetisation Scheme (GMS).
This allows you to invest gold for a period of 8 years. Basically, it is a fixed deposit with gold, wherein depositing your gold will let you earn interest on the deposit and enjoy tax benefits.
Also known as the gold monetisation scheme, it has a minimum investment of just 2 units or 2 grams of gold. As such, anyone can participate in the scheme and reap the benefits of investing in gold. Read on to know more
The purpose of the Gold Deposit Scheme is to mobilise the idle gold lying with people within the country. It also helps control the trend of importing gold. This will help the government utilise gold and unveil the scope to earn good interest rates on gold deposits.
As a residing citizen of India, you can opt for the Gold Deposit Scheme. Below is the list of gold loan eligibility criteria:
Individuals as single or jointly
Hindu Undivided Family
Companies
Trusts
Also known as Short Term Bank Deposit (STBD), it is a popular scheme that comes under the gold monetisation scheme. The term ranges from 1 to 3 years. The annual Gold Loan interest rate varies from 0.35% - 1%, which depends on the weight of the gold. In the short term, the gold remains in the custody of the financial institution.
Similarly, known as Medium- and Long-Term Government Deposit (MLTGD), this is another plan under the gold monetisation scheme. The term of this scheme ranges from 5-7 years for the medium term and 12-15 years for the long term. The annual gold deposit interest rate for these terms is 2.25% and 2.50% respectively.
Financial institutions accept the deposit on the Central Government’s behalf.
Following is the tabular representation of various financial institutions, their interest rates, and tenures:
Name of Bank |
Interest Rate |
Tenure |
SBI Gold Scheme |
||
Short-term gold deposit |
0.50%p.a. |
1 to 3 years |
Medium-term gold deposit |
2.25%p.a. |
5 to 7 years |
Long-term gold deposit |
2.50%p.a. |
12 to 15 years |
HDFC Gold Scheme |
2.50%p.a. |
8 years |
ICICI Gold Scheme |
||
Short-term gold deposit |
NIL |
1 to 3 years |
Medium-term gold deposit |
2.25%p.a. |
5 to 7 years |
Long-term gold deposit |
2.50%p.a. |
12 to 15 years |
Disclaimer: Above-mentioned rates are subject to change at the discretion of the issuer.
The 3 popular gold savings schemes are:
Jos Alukkas’ Easy Buy Gold Purchase Plan
Tanishq Golden Harvest Scheme
Gold Scheme by Kalyan Jewellers
The Gold Deposit Scheme works similarly to opening a fixed deposit with gold. Opting for the gold scheme can benefit you as an individual and establishments as it helps in earning interest, availing tax exemption and getting the security of the gold. Before opting for this scheme, choose one that matches your financial goal.
The Gold Deposit Scheme is a program initiated by the Indian government to encourage people like you to deposit idle gold in banks in exchange for interest. The bank then uses the deposited gold for lending purposes.
At the end of the deposit period, the depositor can receive cash or gold in return.
The minimum investment in a gold monetisation scheme is generally around 10 grams of gold. However, this can vary depending on the scheme and the financial institution offering it.
Therefore, it is important to check with the specific bank or institution for their minimum investment requirements.
You can visit your nearest SBI or jewellery company for details and apply for a Gold Deposit Scheme.
A depositor will get back physical gold as bullion after maturity if he/she opts for redemption in the form of gold.
The principal part will be denominated only in gold. However, the interest will be received in Indian Rupees while redeeming it.
Yes, you may be able to withdraw your deposit prematurely from a gold monetisation scheme, but this will depend on the terms and conditions of the specific scheme and the financial institution offering it.
In addition, there may be penalties or charges for early withdrawal, so it is important to check with the bank or institution for their policies on premature withdrawal.
For gold monetisation schemes, the minimum lock-in period before a withdrawal can vary depending on the type of deposit. In case of premature withdrawal, a penalty may apply, which will be calculated based on the actual market value of the gold deposit on the day of withdrawal and the interest payable for the period the deposit was held.
Once you have deposited your gold with the bank and 30 days have passed, the bank will issue you a system-generated Gold Deposit Certificate to prove your ownership of the gold.
The interest rate on gold deposits varies depending on the policies of the company or bank that you have deposited your gold with. Therefore, you should check with a specific company or bank to determine their interest rate on gold deposits.
Knowing the interest rate given by a lender is also essential when you plan to avail a gold loan during financial emergencies. This is because the gold loan interest rate varies from one lender to another. Furthermore, you may use a gold loan EMI calculator to help you estimate the monthly repayment amount well in advance.
The Reserve Bank of India (RBI) has issued guidelines for gold schemes, which include rules for the purity of the gold, the maturity period, and the interest rates that can be offered.
You, as an individual or institution, can invest in gold bonds with a basic unit of 1 gram of gold, denominated in multiples of gold grams. The minimum investment is 2 units or 2 grams of gold, while the maximum investment allowed per fiscal year is 500 grams or units per person, subject to a cap.