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Gold Deposit Scheme is an ideal investment option for investors who intend to deposit their idle gold in the financial institution or with jewellers. It is a type of fixed deposit with gold, wherein depositing your gold will let you earn interest on the deposit and tax exemption while having safety of your precious metal. 

Return can be received in the form of cash or gold at the end of the year or through monthly payment based on a predetermined amount. The available gold schemes include Gold Monetisation Scheme (GMS), Sovereign Gold Bond (SGB), and Gold coin and Bullion Scheme. 

Eligibility Criteria for Taking Gold Deposit Scheme

A resident of India or organisation who can opt for Gold Deposit Scheme include:  

  • Individuals as single or jointly 

  • Hindu Undivided Family 

  • Companies 

  • Trusts 

Features and Benefits of Taking Gold Deposit Scheme 

The features and benefits of Gold Deposit Scheme include: 

  • Immobilise Unused Gold

The Gold Deposit Scheme was launched for the proper flow of idle gold. By doing so, it increased the proper recycling of domestically-owned gold, thereby reducing the dependency among jewellers on imported gold products.  

  • Tax Exemption

The earnings generated by the Gold Deposit Scheme have been exempted from income tax, wealth tax, and capital gains tax. Also, if there is an increase in the value of gold deposit, capital gains tax will neither be charged on it nor your earned interest.

  • Flexible Redemption

Being a depositor, you can redeem principal or interest on your gold deposits in the form of cash or gold while opting for this scheme. But remember that you have to make your redemption choice during the deposit. 

  • Premature Payment

Premature payment is allowed only after one year of lock-in period. However, a penalty will be applicable on a predetermined interest rate.

Purpose of Gold Deposit Scheme

The purpose of the Gold Deposit Scheme is to mobilise the idle gold lying with people within the country while controlling the trend of importing gold. This will help the government use the gold in fruitful ways and unveil the scope for people to earn interest on their gold holdings.  

Short-Term Gold Deposit Scheme

Also known as Short Term Bank Deposit (STBD), it is a popular scheme that comes under the gold monetisation scheme. The term is 1 to 3 years. The annual interest rate for one year is 0.50%, between 1 to 2 years is 0.55% and between 2 to 3 years is 0.60%. In the short term, the gold remains in the custody of the financial institution.  

Long Term Gold Deposit Scheme 

Similarly, known as Long Term Government Deposit (LTGD), this is another plan under gold monetisation scheme. The term of this scheme ranges from 12-15 years. The annual gold deposit interest rate is 2.50%. Financial institutions accept the deposit on the Central Government’s behalf. 

Gold Deposit Schemes offered by Financial Institutions

In the 2015 budget, the Gold Deposit Schemes were introduced. The main objective of this scheme was to motivate the citizens of India to deposit their idle gold items in financial institutions and receive good returns along with tax benefits on the maturity of the scheme. The three popular gold schemes offered by financial institutions include:

  1. Gold Monetisation Scheme 

  2. Sovereign Gold Bond Scheme 

  3. Gold Coin and Bullion Scheme

  • Gold Monetisation Scheme

This scheme was launched in September 2015 by the Indian Government as an alternative to the previously existing Gold Deposit Scheme. The gold monetisation scheme encompasses the ‘Gold Deposit Scheme’ and the ‘Gold Metal Loan’ scheme, which are revamped and joined together.

The main objective of introducing this scheme was to mobilise gold kept in households or institutions and use it for production. In this way, it would lessen the country's dependence on imported gold.

In short-term, medium-term, and long-term, this scheme ranges between 1 to 3 years, 5 to 7 years, and 12 to 15 years, respectively. According to this scheme, financial institutions choose the lock-in period and the penalty amount. 

  • Sovereign Gold Bond Scheme

Sovereign Gold Bond (SGB) is a government security denominated in gold grams. In general, it is an alternative to physical gold. On behalf of the Indian Government, the Reserve Bank of India administers the sovereign gold bond scheme.

The Reserve Bank of India offers gold bonds on behalf of the Indian Government. In general, these bonds are calculated in gold grams.

Under this scheme, the maximum time limit for investing in the bonds extends up to 8 years. In addition, this scheme provides you with the scope to close it from the fifth year.

  • Gold Coin and Bullion Scheme 

The Gold Coin and Bullion Scheme is another new programme launched by the Indian Government on 5th November 2015. The least deposit for this scheme is raw gold (bars, coins, jewellery excluding metals and stones) equal to 30 gm of gold. However, there is no maximum deposit limit in this scheme.

Table Showing Interest Rates and Tenure Offered by Various Financial Institutions

Following is the tabular representation of various financial institutions, their interest rates, and tenures:  

Name of Bank

Interest Rate


SBI Gold Scheme 



Short-term gold deposit


1 to 3 years

Medium-term gold deposit


5 to 7 years

Long-term gold deposit


12 to 15 years

HDFC Gold Scheme 


8 years 

ICICI Gold Scheme 



Short-term gold deposit


1 to 3 years

Medium-term gold deposit


5 to 7 years

Long-term gold deposit


12 to 15 years

Features and Benefits Offered by Gold Schemes of Financial Institutions

Following are the key features and benefits of Gold Schemes offered by various financial institutions: 

  • The tenure ranges across short term of 1- 3 years, medium-term of 5 - 7 years, as well as long term of 12 to 15 years.

  • Interest received from gold schemes has tax exemption. 

  • Redeeming the deposited gold before its maturity is possible, but that attracts a penalty.

  • Financial institutions have the authority to decide how to use the gold regardless if it is for RBI Gold reserves, auctioning etc. 

  • The worth of gold deposited decides the interest rate payable in cash.

  • You can deposit your gold in all common forms, such as jewellery, coins and bars. 

  • While financial institutions determine the interest rate on gold deposits for short-term schemes, the Government of India has set an interest rate on medium as well as long-term gold deposits.

Gold Deposit Schemes Offered by Jewellers 

Following are the schemes offered by jewellers: 

1. GRT Gold Scheme

It offers several advantages on their gold schemes. The details of their GRT Golden Eleven Flexi Plan are stated below:

The features and benefits of GRT Gold Scheme are as follows:

  • The scheme requires you to pay a predetermined monthly instalment for 11 months. Paying a monthly instalment of a minimum Rs. 500 is essential for investing in the gold scheme.

  • This scheme offers no cash refund, and so the return on invested can be executed in the form of gold only.  

  • An individual can purchase jewellery for the expected value just after a month from the day the previous instalment is paid. Exclusions of jewellery products that you can buy include ruby, emerald, vintage jewellery, diamonds, platinum, and silver.

2. GRT Golden Seed Savings Scheme

The features and benefits of GRT Golden Seed Savings Scheme are as follows:

  • Instalment should be paid per month mandatorily for a total of 11 months.

  • If the wastage amount is more than 18% of accumulated gold, you will need to bear that amount.

  • As per this scheme, instalment amounts remain fixed, and the maturity date cannot be changed too.  

  • Individuals will not be eligible to get the ‘discount on purchase’ option if they discontinue before a period of 7 months after enrolment. 

  • If any cheque is dishonoured, the prevailing gold rate on the realisation date will be considered. Payment defaults will linger the maturity date by that many months for which the default has happened.  

  • Instalment payments need to be cleared before the 10th day of each month for a total period of 15 months.

  • As soon as the monthly instalment amount is cleared, gold will be credited to your account based on the prevailing rate.

3. Gold Scheme Offered by Kalyan Jewellers 

Mentioned below are some of the important features and benefits of the ‘Purchase Advance Scheme’ provided by Kalyan jewellers:

  • The monthly instalment amount ranges between Rs. 500 and Rs. 40,000 as per the chosen ornament. In case there is a default on monthly instalments, you will have to pay 0.25% extra as penalty on the making charges. 

  • If you want to suspend your gold scheme before the 11 months, you can purchase gold jewellery from one of the Kalyan Jewellery stores, according to the present gold rate. However, you will not get any discount on such purchases. 

  • A long-term investment benefit related to your child’s higher education and marriage is also available. 

  • The holder of the gold scheme must be present during the closure of the scheme.

  • The incapability to clear the balance amount by 12th month may cause the cancellation of your purchase. The earlier payments will be refunded via a demand draft and then sent to the address that was registered during the enrolment. 

  • The maximum tenure of this is 365 days and it is mandatory to close the scheme just after buying the chosen ornament.

4. Malabar Gold and Diamond Smart Buy Schemes 

According to the Smart Buy Scheme, the advantages provided on the ‘In stock’ products are:

  • You will find a notable difference in the original cost of the jewellery item chosen, its delivery date, etc., once you select the ‘Smart Buy’ option. 

  • If you plan to customise your jewellery, like bangles, bracelets, rings, neck-pieces, etc., from products in stock, you may get your desired size with this ‘Smart Buy + Customise Option’.

  • The final product’s cost can vary as per its weight and current price of gold. The jeweller's customer care team will also communicate with you to inform you about the cost of the product and its revised weight which you are planning to buy. 

  • If you select a product via the ‘Smart Buy’ option that is not in stock, you will get priority for manufacturing. 

  • In this scheme, discounts differ from one product to another.

5. Tanishq Golden Harvest Scheme

Following are the details of Tanishq Golden Harvest Scheme:

  • According to this scheme, you have to make a monthly payment for 6 months or 10 months as per your selected term, which can be redeemed after the maturity of this scheme.

  • You are entitled to a 75% discount while purchasing gold jewellery via this scheme.

  • Failing to clear payments for above 2 months can cause cancellation of this gold scheme and your principal amount will get refunded.

  • The scheme even provides a special discount on deposited amounts.

  • This gold scheme account will close after 235 days from its issuance if you select the 6-month term. On the other hand, if you have chosen the 10-month term the scheme will continue for 385 days. 

  • This scheme gives you flexibility for depositing an amount as per your financial affordability. The minimum amount payable begins from Rs. 2000.   

6. Tanisque Swarnanidhi Scheme 

Following are some crucial features of this scheme:

  • According to this scheme, the individual has to make a deposit each month for a total of 8 months.

  • The scheme covers only the purchase of diamond and gold jewellery. However, you cannot purchase gold and silver coins with this scheme.

  • There is no limit on instalments you make throughout the term of this scheme.

  • The instalment payments start from a minimum of Rs. 3000. Extra payments will be accepted in terms of Rs. 1000 only.

  • The gold returns can be redeemed after maturity according to the prevailing gold rate. This redemption can be done in cash.  

  • Redemption should be claimed before ten months of enrolment for this gold scheme. With redemption, you will get the refunded amount in cash without any interest.

Popular Gold Savings Scheme 

The three popular gold savings schemes are:  

  1. Jos Alukkas’ Easy Buy Gold Purchase Plan

  2. Tanishq Golden Harvest Scheme

  3. Malabar Gold and Diamonds Smart Buy Plan

Gold Deposit Scheme works similar to opening a fixed deposit with gold. Opting for the gold scheme can benefit individuals and establishments as it helps in earning interest, availing tax exemption and getting security of their gold. Before opting for this scheme, make sure to choose one that matches your financial goal.

FAQs on Gold Deposit Scheme

  • ✔️What is the Gold Deposit Scheme?

    Gold Deposit Scheme is a suitable investment vehicle. Several financial institutions enable their customers to deposit their idle gold and get rewards in the form of interest, tax benefits, and security.

  • ✔️Who can apply for the Gold Deposit Scheme?

    Any resident Indian person of a financial institution can apply for the Gold Deposit Scheme.

  • ✔️How to apply for the Gold Deposit Scheme?

    You can visit your nearest SBI or jewellery companies as stated above for details and apply for a Gold Deposit Scheme.

  • ✔️In what form will a depositor get back his gold in maturity?

    A depositor will get back physical gold as bullion after maturity if he/she opts for redemption in the form of gold.

  • ✔️How will the principal and interest be denominated at the time of redemption?

    The principal part will be denominated only in gold. However, the interest on it will be received in Indian Rupees while redeeming it.