Scheme Details

Gold Monetisation Scheme

The Gold Monetisation Scheme (GMS) offers a unique opportunity to earn interest on idle gold holdings by depositing them with banks. Learn the key details of this scheme and how it can benefit you.

Scheme Details

Deposit Limits:

  • Minimum: You can deposit a minimum of 10 grams of raw gold (bars, coins, jewellery excluding stones and other metals) at any one time.
  • Maximum: There is no upper limit.

Purity Requirement:

  • Gold deposited must have a fineness of 995.

Medium Term Government Deposit (MTGD):

  • Period: 5 to 7 years
  • Rate of Interest (ROI): 2.25% per annum
  • Lock-in Period: 3 years

Long Term Government Deposit (LTGD):

  • Period: 12 to 15 years
  • Rate of Interest (ROI): 2.50% per annum
  • Lock-in Period: 5 years

Interest and Redemption:

  • Interest is calculated in INR and paid based on the prevailing gold value on the deposit creation date.
  • Banks accept deposits on behalf of the Central Government, and deposit receipts and certificates are issued accordingly.
  • Premature withdrawal is allowed, subject to minimum lock-in periods and penalties. For Medium Term Government Deposits (MTGD), premature redemption is only in INR. At maturity, the principal can be redeemed either in INR equivalent to the deposited gold's value or in gold, at the depositor's option.

More About the Gold Monetisation scheme

  • Features of the Gold Monetisation scheme
  • The Gold Monetisation Scheme (GMS) offers several key features to individuals and entities looking to monetise their idle gold holdings. Participants can deposit gold in the form of bars, coins, or jewellery (excluding stones and other metals) with a minimum purity of 995 fineness. The scheme provides flexibility with no maximum limit on deposits, allowing for substantial holdings to be utilised effectively. Deposits can be made under two schemes: Medium Term Government Deposit (MTGD) for 5-7 years and Long Term Government Deposit (LTGD) for 12-15 years, each offering competitive annual interest rates. Premature withdrawals are allowed with applicable conditions, offering liquidity options.
  • Benefits of the Gold Monetisation scheme
  • The Gold Monetisation Scheme (GMS) presents several benefits for participants aiming to leverage their gold holdings effectively. It offers an opportunity to earn interest on idle gold, which otherwise incurs storage costs. Participants can deposit gold in various forms (bars, coins, jewellery) with assured purity checks by accredited centers, ensuring transparency. The scheme provides flexibility with no upper limit on deposits, catering to both individual and institutional investors. With competitive interest rates and options for premature withdrawal, it balances security with liquidity needs. Additionally, it promotes financial inclusion and contributes to the country's gold reserves, aligning savings with national economic objectives.
  • What are the documents required for the Gold Monetisation Scheme?
  • To participate in the Gold Monetisation Scheme (GMS), individuals typically need to provide basic identification documents such as PAN card, Aadhaar card, passport, or voter ID for identity verification. Additionally, proof of address documents like utility bills, bank statements, or rental agreements are required. For entities like trusts, companies, or institutions, registration certificates and authorisation documents may be necessary. Documentation related to the ownership and purity of the gold being deposited, such as hallmark certificates or invoices, is also essential to ensure compliance with scheme regulations and purity standards set by accredited assayers.

Frequently Asked Questions

The Gold Monetisation Scheme (GMS) and Sovereign Gold Bonds (SGB) are two distinct initiatives related to gold investment in India. GMS allows individuals to deposit physical gold with banks in exchange for interest earnings, based on the gold's purity and tenure chosen (medium term or long-term). In contrast, SGBs are government-issued bonds denominated in grams of gold, where investors buy gold bonds instead of physical gold, with interest paid annually and redemption in cash or gold. GMS aims to mobilise existing gold holdings for financial benefit, while SGBs promote gold investment in a financial instrument backed by the government.

The Gold Monetisation Scheme (GMS) is an initiative by the Indian government aimed at mobilising the idle gold held by individuals and institutions in the country. Under this scheme, individuals can deposit their physical gold (in the form of bars, coins, or jewellery) with banks and earn interest on it. The deposited gold is tested for purity by certified centers and then stored securely. Depending on the scheme variant chosen (medium term or long-term), deposit periods and interest rates vary. This scheme not only helps individuals earn interest on their idle gold but also reduces the country's reliance on importing gold for domestic needs.

Under the Gold Monetisation Scheme (GMS), the minimum deposit of raw gold that can be made at any one time is 10 grams. This gold can be in the form of bars, coins, or jewellery (excluding stones and other metals) with a purity of 995 fineness. The scheme allows individuals, including residents, HUFs, partnership firms, trusts, companies, and government entities, to deposit their idle gold holdings and earn interest on it. There is no upper limit on the maximum deposit, making it flexible for individuals and organisations to utilise their gold holdings effectively while earning returns through the scheme.