HDFC Gold Loan & Schemes

HDFC Bank Gold Scheme

✓ Gold Loan up to 2 Cr ✓ Interest Rate Starting @ 10% ✓ Highest Gold Loan / Gram

Do you believe gold is just limited to ornaments, bars, or coins? What if told you there’s another way to invest in gold? Today, gold has become a much more lucrative financial asset, because you can reap the returns on your gold investments without even purchasing physical gold. Take the HDFC Gold Scheme, for example. HDFC Bank offers non-conventional ways of investing in gold, with more flexibility, higher returns and less stress.

 

It truly is the best of both worlds: you no longer have to worry about the security of your physical asset, while simultaneously’ enjoying the benefits of gold prices, by pledging Gold coins and bars, or investing in Gold ETFs or Gold Sovereign Bonds with more flexibility, higher returns, and lower stress. 

 

Such schemes are intended as Gold monetization schemes. Why? Because through such schemes gold finds itself useful in other ways than just sitting idle in your household. Gold can be channelled into economically productive uses by being pledged, invested...you get the drift.

Know More About HDFC Gold Scheme

HDFC Bank offers multiple options to monetize gold, including the HDFC Sovereign Gold Bonds, HDFC Bank Gold Bonds, Gold fund, Gold loan, among others. You can both invest in gold as well as borrow against the gold you already own. 

 

Take the Sampoorna Bharosa Gold Loan by HDFC, for example. It allows you to hypothecate or pledge your gold as security in order to avail a quick loan with minimal paperwork. Then, HDFC also has a golf fund that generates returns aligned with the value of gold. Let’s see how and when each of these products can be helpful to you.

HDFC Gold Loan

Do you have a financial emergency? Do you own some gold jewellery or coins that are lying idle? Why not borrow money against this gold and wade through the financial crisis? That’s what HDFC’s Sampoorna Bharosa Gold Loan which roughly translates to “complete trust gold” — can help you with. 

 

If you’re ready to pledge your gold against the loan, you can simply avail a loan by walking into any authorised bank branch. The amount of loan will depend upon the valuation of the gold and you can be offered a loan of up to 75% of the value of your pledged gold. 

 

The whole process is hassle-free with minimal paperwork: once you fill an application, the bank will examine and evaluate the gold being pledged. The processing time is so fast, you can practically get this loan over the counter and things get especially easier for existing customers of the bank, who are often offered preferred gold loan HDFC bank interest rates.

Features of HDFC Gold Loan

  • Use of loan money: As such the gold loan is supposed to help you tide off financial difficulties in the short term. So you can use the money for agricultural or business needs, or personal financial emergencies like hospital bills, short-term cash crunch, etc. The purpose cannot be speculative or capital needs. 

  • Tenure: You can avail a loan for a period of 6 months to 4 years.

  • Interest: Loan repayment only requires you to service the interest. The gold loan HDFC bank interest rate is normally around 12% per annum.

  • Prepayment: Good news! There are no foreclosure charges or penalties if you choose to prepay the loan before time.  

Benefits Of HDFC Gold Loan

  • The loan approval process can be as quick as an hour, so if you’re looking for a loan that can bring you cash flow with minimal paperwork and documentation (and if you’re comfortable pledging your gold), this is the quickest way. 

  • If you’re already an HDFC customer, you can get a preferred gold loan HDFC bank interest rate — if you identify as a Preferred, Classic, Imperia customer or if you’re a woman customer of the bank, definitely make use of this.

  • If you want a good loan offer, the banks offer the highest gold loan per gram and low processing fees if you pledge hallmarked jewellery. In fact, the higher the purity of gold, the better the loan offer.

Documentation and Eligibility for HDFC Gold Loan

As mentioned before, the documentation involved in this kind of loan is minimal. If you wish to avail of this loan, simply submit the following documents for proof of identity and proof of address.

 

  • PAN Card (mandatory)

  • Another ID documents like Passport, Driving Licence, Voter ID, Aadhar Card. 

  • A Copy of the above documents

  • Bank statement for the past three months (if you’re an HDFC customer, you may just get it from the bank)

  • Salary slip or the latest Form 16 as proof of income

Eligibility for HDFC Gold Loan

  • Age: Between 21 to 60 years at the time of application

  • Employment status: Employed at a company or public sector undertaking, been in 1-2 years of continuous employment, and a minimum income threshold of Rs 15000 (Rs 20000 for metro cities) is applicable. 

HDFC Sovereign Gold Bond

Under the HDFC Sovereign Gold Bond Scheme, you can buy and invest in gold without actually buying physical gold. This saves you the anxiety of ensuring the security of your physical asset. With digital gold, no need to look for lockers.

Features and Benefits of HDFC Gold Bond

  • Return: The interest rate is fixed at 2.5% of the amount you initially shell out for the investment.

  • Tenure: The loan can be availed for a period of 8 years. 

  • Lock-in period: The lock-in period is 5 years. This means that there are exit options available in the 5th year onwards. 

  • Minimum investment: You need to make a minimum investment of 1 gram of gold. The denominations are made in multiples of grams.

  • Maximum subscription: You can make a maximum investment of 4 kg gold if you’re an individual entity, and 20kg if you’re a trust, University or Charitable Institution.

  • Certificate: As an investor under this scheme, you will be issued a Holding Certificate for the bonds. These are issued under the Government Security Act, 2006. As such, they’re just like any Government of India stocks. 

  • Tax: No TDS is deducted on the HDFC Sovereign Gold Bond, neither is there any capital gains tax applicable on redemption.

Eligibility Criteria for HDFC Gold Bond

Any resident Indian is eligible for the bonds. This includes individuals, HUFs, trusts, Universities, Charitable institutions. You can also apply on behalf od a minor.

HDFC Gold Fund

If you’re looking for a smart way to invest in gold, the Gold Fund HDFC is a good choice to do so without actually buying the physical metal. It is an open-ended fund of fund scheme which invests in the 

 

The HDFC Gold Fund is an open-ended gold fund scheme that invests in the HDFC Gold Exchange Traded Fund with an option of direct/growth. To give you a primer on Gold Exchange Traded Funds (Gold ETFs), they’re open-ended mutual fund schemes that focus on gold prices. They’re preferred over physical gold investment because they come with a high level of profitability, stability and liquidity. 

Features of HDFC Gold Fund

  • Minimum Investment: To get started in the fund, you will need to make a minimum initial purchase of Rs 5000. Additional investments will need to be a minimum of Rs 1000. 
  • Redemption: Since it’s an open-ended fund, you can redeem it at any time. The liquidity of this investment is high.
  • No physical gold involved: ETFs do not require any physical storage. They’re listed on the stock exchange, which is why they are highly liquid.
  • SIP: You can also choose to opt for Systematic Investment Plans with monthly or quarterly investments.
  • Flexibility: Unlike physical gold, you can purchase as little as 1 gram of gold.
  • Return: To calculate how much you will receive at the time of redemption, find out the simple average of the closing price of gold of the previous 3 working days.

Frequently Asked Questions on HDFC Bank Gold Scheme

  • ✔️What documents are required for availing a gold loan from HDFC?

    The basic KYC documents and financial documents are needed, including:

    • PAN Card (mandatory)

    • Another ID documents like Passport, Driving Licence, Voter ID, Aadhar Card. 

    • A copy of the above documents

    • Bank statement for the past three months (if you’re an HDFC customer, you may just get it from the bank)

    • Salary slip or the latest Form 16 as proof of income

  • ✔️What all HDFC gold schemes are there?

    HDFC Bank offers multiple gold schemes for purchasing and borrowing - HDFC Gold Fund, HDFC Gold Bond and HDFC Gold Loan.

  • ✔️Why should I opt for a gold loan?

    A gold loan can be extremely helpful when you need funds urgently, and

    1. Want to avoid extensive paperwork with just basic KYC documents

    2. Own gold in some form that you can pledge

    3. Do not have a credit history or CIBIL score that can secure you another loan

  • ✔️What is the HDFC Sovereign Gold Bond (SGB)? Who is the issuer?

    Sovereign Government Bonds, as the name suggests, are government securities denominated in grams of gold. Think of them as a substitute for physical gold, that are highly liquid and profitable. 

    The SGBs are issued by the Reserve Bank of India (RBI).

     

  • ✔️Why should I buy SGB rather than physical gold?

    SGBs are the safest way for you to buy and store gold. Unlike physical gold, you don’t have to worry about lockers and security. You also don’t have to worry about the quality, purity, making charges etc that usually come with physical gold. You get an assured return of 2.5% per annum and the flexibility to trade it on the stock exchange. 


    Therefore, the risks and costs together make HDFC Sovereign Gold Bonds an efficient option.

  • ✔️What are the risks in investing in SGBs?

    The market prices are always fluctuating, so that risk is always existing. However, you will not lose in terms of the units of gold that you invested.

  • ✔️Who is eligible to invest in the HDFC Sovereign Gold Bond?

    Any resident Indian is eligible for the bonds. This includes individuals, HUFs, trusts, Universities, Charitable institutions. You can also apply on behalf of a minor.

  • ✔️Can NRIs invest in HDFC Gold Bonds?

    No, you need to be a resident entity in India.

  • ✔️What if my residential status changes?

    If you’re an individual investor whose residential status changes from resident to non-resident, you can still continue to hold the bond till its maturity date.

  • ✔️Is premature redemption allowed on HDFC Gold Bonds?

    The bond is issued for a period of 8 years, but you can encash it early starting from the 5th year.

  • ✔️How can I get the best terms on my gold loan?

    While banks also entertain non-Hallmarked jewellery, Hallmarked gold will be of greater value. It will fetch you favourable terms. Purity specifications include gold in the 18-24 carat range. Note that you cannot pledge gold bars or mangal sutra.

  • ✔️Can a Minor invest in HDFC Sovereign Gold Bond?

    Yes. If you’re the guardian, you can make an application on behalf of a minor.

  • ✔️What is the lock-in for investment in Sovereign HDFC Gold Bond?

    There is a lock-in period of 5 years. Post that, you have the option to exit by trading the bond on the stock exchange.

  • ✔️Do I get any benefits as an HDFC account holder?

    Yes, those with an account in the bank can reap the benefit of faster processing times as well as preferred rates if you have a strong banking relationship.

  • ✔️How long does it take to process a gold loan?

    Once the documentation is in order, the gold is appraised and verified. All this process can be done within an hour and the loan can be disbursed. If you’re a customer of the bank the process gets expedited even further and comes with more favourable terms. 

     

    HDFC Bank provides you with a plethora of options to invest in gold or monetise gold without actually even having to purchase the metal. As customers of the bank, you also get quick loans against gold as fast as an hour.

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