Is your gold just sitting in a locker gathering dust? It's time to let it shine-and earn for you! The Gold Monetisation Scheme (GMS), launched by the Government of India, allows you to deposit your idle gold and earn tax-free interest on it. This quick guide covers everything you need to know-from how it works to who can apply and what to expect.
The Gold Monetisation Scheme is a smart financial tool that enables you to deposit your physical gold (jewelry, coins, or bars) in banks and earn interest over time. Think of it like a fixed deposit-but in gold!
Once your gold is deposited, it's purified, melted, and converted into bullion. In return, you get a Gold Savings Account and start earning interest based on the deposit term you choose.
Here are some compelling benefits:
✅ Earn Interest: Make your gold work for you while it sits safely in a bank vault.
✅ Tax-Free Returns: Interest and capital gains under GMS are exempt from Income Tax and Capital Gains Tax.
✅ No Maximum Limit: There is no upper limit on the amount of gold you can deposit.
✅ Flexibility in Forms: Gold coins, bars, and even old jewelry are accepted.
✅ Safety First: Your gold is stored securely in bank-certified vaults.
The GMS is open to:
✅ Resident individuals
✅ Hindu Undivided Families (HUFs)
✅ Proprietorship and partnership firms
✅ Trusts, mutual funds, ETFs, and companies
✅ Charitable institutions
✅ Joint accounts (2 or more eligible depositors)
You need to deposit at least 10 grams of gold, which is about the size of a small coin. Beyond that, the sky's the limit.
The GMS offers three deposit options based on term:
|
Deposit Type |
Tenure |
Interest Rate |
Lock-in Period |
|
Short-Term |
1 to 3 years |
Decided by the bank |
As per bank terms |
|
Medium-Term |
5 to 7 years |
~2.25% per annum |
3 years |
|
Long-Term |
12 to 15 years |
~2.50% per annum |
5 years |
Note: Interest rates may vary. Always check with your bank (e.g., SBI, PNB) or RBI's website for the latest rates.
https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=10084&Mode=0#F12
Visit an Authorized Bank Approach a designated bank (like SBI) offering the GMS.
Purity Testing Your gold will be assessed at a certified Collection & Purity Testing Centre (CPTC).
Melting and Conversion If you agree, the gold is melted and turned into bullion. The exact quantity of pure gold is noted.
Certificate & Account Opening A certificate of gold quantity is issued, and a Gold Savings Account is opened in your name.
Start Earning Sit back and watch your idle gold earn money!
Sentimental Loss: Your original gold items will be melted, including those with emotional or design value. You won't get back the same ornaments.
Long-Term Lock-ins: Be sure of your timeline. Depending on your deposit type, early withdrawal may not be allowed.
Compare Returns: Compare GMS interest rates with other investment options like FDs, mutual funds, or sovereign gold bonds.
Before you leap, ask yourself:
Am I okay parting with sentimental jewelry forever?
Do I understand the interest structure and lock-in periods?
Does this fit into my financial planning?
If the answers lean toward "yes," then the Gold Monetisation Scheme could be a golden opportunity to grow your wealth with assets you already own.
The GMS isn't just about earning-it's about putting your dormant assets to work. If you're not emotionally attached to your gold and are looking for safe, tax-free returns, this scheme offers a solid opportunity to diversify your portfolio.