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  • All that you need to know about the Gold Monetization Scheme

    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.

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    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.

    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

    FAQs

    1. 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.

    2. 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.

    3. 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).

    4. What is the tenure of a Short Term Bank Deposits (SRBD)?

      The tenure of a Short Term Bank Deposits is 1-3 years.

    5. 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.

    6. 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.

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    News About Gold Monetization Scheme

    • Gold monetisation scheme modified to benefit investors

      The much hyped Gold Monetisation Scheme launched by the government last year has undergone another modification, with the Finance Ministry tweaking the maturity options. Investors can choose to redeem their principal either in gold or its equivalent value in Indian rupees on maturity. This combined with the interest could bring in more investors, something the government aims to achieve, primarily targeting temples who have tonnes of gold reserves.

      2nd April 2016

    • Gold Monetisation Scheme gets deposits worth Rs 3,000 crore

      The much talked about Gold Monetisation Scheme implemented by the Union Government has garnered deposits to the tune of Rs 3,014 crore, with over 1,100 kg of gold collected so far. After a slow start, the scheme picked up speed after modifications were made to it, with depositors earning an interest of 2.5% per annum on their gold. The government permitted 46 centres to function as Collection and Purity Testing centres, each one designed to accept deposits. Successful implementation of this scheme could reduce imports of gold in the country, utilising available resources.

      26th February 2016

    • Indian Government does away with tax on Gold Deposits

      In a bid to make use of all the gold and gold jewelry items that lie idle in numerous Indian households, the Indian government has decided to offer tax benefits to customers who deposit their gold items under the Gold Monetization Scheme. This was a recent scheme launched by the Central government to make use of gold that is lying idle in various households and temples.

      Under the Gold Monetization Scheme, gold jewelry, bars or coins can be deposited with banks in turn for interest that can be redeemed as cash or as gold. In case customers wish to withdraw their deposits as money, there will be no capital gain tax charged on the same. The Indian government has come out with this scheme since it strongly believes that greater utilization of gold will reduce gold imports.

      25th January 2016.

    • Changes made in Gold Monetization Scheme.

      The Reserve Bank of India has made some important changes in the Gold Monetization Scheme for deposits made in bulk. These changes are made to attract gold lying idle in the temples. Now, depositors can deposit golds directly with the refiners with whom participating banks have signed agreements for the scheme. Also, a bank can accept deposits a select branches. Now, depositors need not move gold to a collection centres far away from their storage.

      As notified by the government, now the existing rate of interest on a medium term deposit is 2.25% and on term deposit 2.50% annually. Now, depositor would be able to withdraw long term and medium term deposits after a minimum lock-in period.

      Besides, the central bank has also permitted banks to sell India gold coins manufactured by MMTC under the 'India gold coin' scheme. The principal and interest on short-term deposit will be denominated in gold while for medium and long-term deposits, interest will be calculated in rupees and the principal will be denominated in gold.

      22nd January 2016.

    • Gold Bonds pricing to be revised

      The ambitious Sovereign Gold Bond plan is bound to see some changes, with the RBI thinking to tweak the pricing to spur demand. The scheme has so far collected Rs 246 crore through 63,000 applications, accounting for 917 kg of gold. Present prices for these bonds are decided after keeping a lag of one week, which in certain cases have made the cost of gold bonds higher than the market price. The government hopes that this new pricing will help it sell bonds worth Rs 15,000 crore by next year.

      BankBazaar News About Gold Monetization Scheme

      23rd December 2015

    • Changes in the newly launched gold monetization scheme

      The government of India recently decided to make some changes in the recently launched Gold Monetization Scheme, following the weak response faced by this scheme in the first month of its launch. The scheme was launched on 5th November, 2015 along with two other gold schemes. The main intention behind the launch of this was to mobilize gold lying idle in households and utilize the power of gold for the country's economic growth.

      The Gold Monetization Scheme was launched to attract nearly 20,000 tonnes of gold saved in Indian households and temples into the banking system. However, in the first two weeks, the scheme could only attract only 400 grams of gold which is rather a poor response to this scheme.

      Henceforth, the government of India announces several steps to make the scheme more attractive for consumers. It decides to include steps such as removal of capital gains and income taxes on the interest earned. Since support from the bank can be crucial for making this scheme a success, the government of India may even decide to provide incentives to banks.

      BankBazaar News About Gold Monetization Scheme

      3rd November 2015

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