The Gold Deposit Scheme (GDS) is a viable option for investors who intend to multiply their wealth with the help of their gold assets. This allows you to invest your gold for a period ranging from 1 to 15 years. It functions like a fixed deposit, wherein the deposited gold helps you earn interest and enjoy tax benefits.
As a residing citizen of India, you can opt for the Gold Deposit Scheme. Below is the list of gold loan eligibility criteria:
Individuals (with or without co-applicants)
Hindu Undivided Family
Companies
Trusts
Here are simple steps you can follow to apply for a GDS:
Select an authorised bank to apply for the scheme
Visit a branch and fill out the application form with the necessary details
Get the value of the gold you wish to deposit appraised
Submit the application form with the required documents
Following this, officials will further guide you through the process.
The Gold Deposit Scheme encourages people to deposit their gold in financial institutions to earn interest. The bank then uses the deposited gold for lending purposes.
The annual gold deposit interest rate for short-term schemes is determined by banks and usually ranges from 0.50% to 0.60%. Meanwhile, the rate of interest for medium and long-term deposits ranges between 2.25% and 2.50% p.a. This is as of 9th February 2024.
The minimum investment required for a gold monetisation scheme is 10 grams of raw gold.
On maturity, you can redeem your deposit in the form of physical gold or cash.
The principal and interest of your Gold Deposit Scheme are denominated in gold and Indian rupees, respectively.
Yes, you may be able to withdraw your deposit prematurely from a Gold Deposit Scheme. For medium-term deposits, you can make premature withdrawals after the completion of a 3-year lock-in period. Meanwhile, for long-term deposits, the lock-in period is set to 5 years. In addition, there may be penalties or charges levied on early withdrawal, which leads to an overall reduction in the total interest receivable.
The tenure of gold deposits usually ranges between 1 and 15 years. However, this may differ from one scheme to another.
Once you have deposited your gold with the bank and 30 days have passed, a digital system-generated Gold Deposit Certificate is moved to a secure platform. The bank develops this copy on behalf of the government and sends it to you.
RBI has issued certain guidelines regarding the purity of the gold, the maturity period, and the interest rates offered. To know more about these in detail, check out the gold scheme guidelines issued by the Reserve Bank of India.
The gold jewellery undergoes a melting process and is transformed into bars with a fineness of 995. The weight, measured in 995 fineness, is regarded as the ultimate quantity credited to the customer's gold deposit account.