Gold Monetisation Scheme
Resident Indians can deposit gold under Gold Monetisation Scheme. The deposit will be denominated in grams of gold with purity 995.
Gold Monetization Scheme
The Gold Monetization Scheme was launched on 5th November by the Prime Minister Narenda Modi. The scheme is designed to help you earn interest on your unused gold lying idle in bank lockers. The Gold Monetization Scheme is basically a new deposit tool to ensure mobilization of gold possessed by various families and institutions in India. It is expected that the scheme would turn gold into a productive asset in India. This new gold scheme is a modification of the existing Gold Deposit Scheme (GDS) and Gold Metal Loan Scheme (GML), and it would replace the existing Gold Deposit Scheme, 1999
The objective of the scheme was to safeguard the gold held in Indian households and also make productive use of it. It also aimed at cutting down the import of gold by decreasing the demand. The depositors earn interest on their metal accounts. Once the gold is deposited in the metal account, it will start earning interest on the same.
Deposit allowed under Gold Monetization Scheme 2015
An investor can deposit gold for short, medium and long terms under the Gold Monetization Scheme. The scheme would allow an investor to deposit gold in Short Term Bank Deposits (SRBD) and Medium and Long Term Government Deposit (MLTGD). The tenure of a Short Term Bank Deposit is 1-3 years. The Medium and Long Term Government Deposits can be opened for 5 -7 years and 12-15 years respectively. The Short Term Bank Deposit would be accepted by individual banks on their own account. But the Medium and Long Term Government Deposits would be accepted by banks on behalf of the Government of India based upon notification issued by the Reserve Bank of India.
Following are the salient features of Gold Monetisation Scheme-
- Easy storage of gold: The Gold Monetisation Scheme offers security to gold by not only storing it. The owner would get returns in the form of money or gold when the plan matures
- Utility for Idle gold: The Gold Monetisation Scheme will not only earn interest money but also offers the option of encashing the gold at maturity which gives the advantage of the appreciating value of gold.
- Deposit Flexibility: Gold in any form of ornaments, jewellery coins or gold bars can be deposited under the Gold Monetisation Scheme. Deposits of gold encrusted with gemstones are not allowed.
- Flexibility in Quantity: The minimum deposit that can be made in a gold monetisation scheme is 30 grams of any purity. There is no maximum limit.
- Convenient tenures: There are 3 term deposit plans available Under the Gold Monetisation Scheme, which includes short-term tenure of 1 to 3 years. Only a nominal penalty is imposed if the deposit is withdrawn before the end of the tenure.
- Attractive interest rates: Depending upon the period of deposit, 0.5 to 2.5 per cent interest could be earned. Short-term deposit rates are decided by the banks concerned, while the medium and long deposit interest rates are decided by the Central Government.
- Variety in Interest Calculation: For short-term bank deposit under the Scheme does not calculate interest is given in the form of gold in grams.
- Tax Benefits: One does not have to pay capital gains tax on the profits made through the Gold Monetisation Scheme. The capital gains made from the Gold Monetisation Scheme are exempt from wealth tax and income tax.
Gold Monetization Scheme Eligibility
All residents Indians can invest in this new Gold Monetization Scheme. 2015.
Key features of Gold Monetization Scheme
The Gold Monetization Scheme comes with the following features:
- The scheme accepts a minimum deposit of 30gm of raw gold in the form of a bar, coin or jewelry.
- There is no maximum limit of investment under this scheme.
- The scheme allows premature withdrawal after a minimum lock-in period. However, it charges penalty for such withdrawals.
- All designated commercial banks would be able to implement the Gold Monetization Scheme in India.
- The scheme would offer interest at 2.50% per year which is higher than previous rates offered on gold investments.
- The short term deposits offered by Gold Monetization Scheme can be redeemed in either gold or in rupees at current rates applicable at the time of redemption.
Benefits of investing in Gold Monetization Scheme
By investing gold in the Gold Monetization Scheme 2015, an investor can enjoy the following benefits:
- You would earn interest on your idle gold which would add value to your savings.
- The scheme would benefit the country by reducing its gold import.
- The schemes offers flexibility. You can withdraw your investment/gold as and when you need it.
- You can start your investment with as low as 30gm of gold.
A portion of the gold collected through the Gold Monetization Scheme can be sold or lent to MMTC and RBI for minting of gold coins and sale. Thus, the gold deposited through this scheme will be re-circulated in the country to help reduce gold imports. Gold being the most precious asset of the country, the Government of India aims to use it for the purpose of nation building and strengthen the country’s economy
- Does Gold Monetization Scheme 2015 allow withdrawal of investments?
Yes, the scheme allows withdrawal of your investments. You can withdraw your gold after completing the minimum lock-in period.
- What is the rate of interest offered by the Gold Monetization Scheme?
The rate of interest offered by the scheme ranges from 2.25% to 2.50% per year.
- How many deposit schemes are available under the Gold Monetization Scheme?
Three deposits schemes are available under the Gold Monetization Scheme which include - Short Term Bank Deposits (SRBD) and Medium and Long Term Government Deposits (MLTGD).
- What is the tenure of a Short Term Bank Deposits (SRBD)?
The tenure of a Short Term Bank Deposits is 1-3 years.
- For how long can I invest in a Medium Deposit?
You can invest in a Medium Deposit for a period of 5 to 7 years.
- Can I invest in a Long Term Deposits for 14 years?
Yes, you can invest in a Long Term Deposit for 14 years. The Gold Monetization Scheme offers Long Term Deposits for a period of 12 to 15 years.