Home > Finance > Excess gold lying idle in your locker can earn you income. Here’s how

Excess gold lying idle in your locker can earn you income. Here’s how


Gold lying in your locker appreciates in value if gold price goes up but does not pay you interest. Instead you have to pay bank locker charges on the same. Now your idle gold can earn interest apart from the appreciation of value. You can deposit the idle gold in an RBI designated bank and earn interest on the same. This facility is available under RBI’s Gold Monetisation Scheme. This is just like a bank fixed deposit where you deposit your idle gold with the bank and at the maturity, you get gold or the value of gold back along with the interest earned on the same. The gold value will be based on the prevailing price at the time of maturity, but the interest will be computed on the deposit value of gold.

Your gold will be securely maintained by the bank, thus this scheme take away your worry to store gold. The scheme is offered only by the RBI designated banks.

Here are the features of the Gold Monetisation Scheme or Revamped Gold Deposit Scheme. You may also call it as gold fixed deposit.

  • A resident Indian individual of an institution can invest in this scheme. Gold FD can be opened in joint names as well.
  • Gold is accepted in the form of raw gold i.e. gold bars, coins, jewellery excluding stones and other metals.
  • An investor can deposit a minimum of 30 grams of gold. There is no maximum limit.
  • Investors can choose any term between 1 and 15 years. Different tenure options are as below:

> Short Term Bank Deposit (STBD) : Tenure 1 to 3 years

> Medium Term Government Deposit (MTGD) : Tenure: 5-7 years

> Long Term Government Deposit (LTGD) Tenure 12-15 years

(Under the medium term and the long term, the deposit will be accepted by the Bank on behalf of the Central Government.)

  • Iterest rates offered under Gold Monetisation Scheme are as below:


– For 1 year : 0.50% p.a.

– Above 1 year up to 2 years : 0.55% p.a.

– Above 2 years up to 3 years : 0.60% p.a.

> MTGD and LTGD : 2.25% p.a.

  • The principal and interest on STBD shall be denominated in gold. At present, in the case of MTGD & LTGD, the principal will be denominated in INR. The interest shall be paid in Rupees annually on 31st March or cumulative interest on maturity.
  • Depositor will have option to receive payment of simple interest annually or cumulative interest (compounding annually) on maturity. The option to be exercised at the time of deposit.
  • The scheme allows premature withdrawal as below:

> STBD : Allowed after a lock-in period of 1 year with a penalty on applicable interest rate.

> MTGD : Allowed to be withdraw any time after 3 years with penalty on interest

> LTGD : Allowed to be withdraw any time after 5 years with penalty on interest

  • Earnings under the Gold Monetisation Scheme are exempt from capital gains tax, wealth tax and income tax. There will be no capital gains tax on the appreciation in the value of gold deposited, or on the interest you make from it.
  • At the time of maturity, you will not get the gold in the same form which you had deposited. The gold jewellery or ornaments deposited would be melted and assayed by the PVC.

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