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Gold Monetisation Scheme

Gold Monetisation Scheme 2022

Last Updated 24th May 2022

  • Gold monetisation scheme was brought into function in the year 2015 by the Government of India.
  • Investments in the gold monetisation scheme can be made for 1-15 years.
  • The interest on the gold monetisation scheme is charged as per the investment tenure.
  • Before making investments into this scheme, one is required to get their gold tested at the Purity testing centre.
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About Gold Monetisation Scheme

Gold monetisation scheme was introduced by the Government of India in the year 2015-16 to mobilise the idle gold lying in the households for productive use. The investment in the gold monetisation scheme can be made for a short term, medium-term or long term.

Here is how you can invest in Gold Monetisation Scheme

Investing in the gold monetisation scheme is a good option as it keeps your gold safe. Unlike putting your gold in bank lockers, you can also prevent yourselves from paying fees of securing your precious yellow metal. The best side is, you can earn returns on your investments as well.

Process of investing in gold monetisation scheme:

  • To register under the gold monetisation scheme, you need to visit the authorised Purity Testing centre near your location. It is crucial to get your assets tested at the PTC, which will issue you the certificate about the value of your gold.
  • After getting the certificate from the authorised PTC, you need to visit your bank and show them the same.
  • You may need to open a savings account if you don’t have an account in the bank. The bank account will be opened equal to the value of gold, as mentioned in the certificate.
  • The interest earned by the gold monetisation scheme will be credited in your account, and the rate will depend on the tenure of the scheme.

Here Are Some Features Of Gold Monetisation Scheme That You Need To Know

  • Tenure: Investment in the gold monetisation scheme can be made for short, medium and long tenures. For shorter tenures, you need to invest your gold for 1 to 3 years, and the mandate of medium and long term investment is 5 to 7 years and 12 to 15 years, respectively.
  • Interest rate: The gold monetisation scheme interest rate is dependent on the investment tenure:
    • For short tenure ( 1 year) : 0.50% per annum
    • (1-2 years): 0.55% per annum
    • (2-3 years): 0.60% per annum
    • For medium and long tenures: 2.25% per annum.
  • Forms of investment: Investing your gold for a short tenure provides you to choose between getting the physical gold or cash at the time of maturity. However, if you have invested in a medium and long term gold monetisation scheme, the current value of the gold is paid in cash.
  • Gold deposit: To invest in the gold monetisation scheme, you need to spend a minimum of 30 grams in various gold forms such as; coins, jewellery and gold bars. There is no maximum limit to invest in the scheme.
  • Calculation of interest rate: The interest earned in the gold monetisation scheme is paid either in grams or rupee form. For short term investments, you may get an interest in the grams form. For instance, if the rate of interest is 1% and you have invested 200 grams, you will get 2 grams per annum as interest. However, for medium and long term investments interest is received in the form of cash or payment only. For example, if you have invested 50 gms at the value of ₹ 1.50 Lakh for 6 years and the rate of interest is 2.5% you will earn ₹ 3,750 as interest.

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Should You Invest In A Gold Monetisation Scheme?

If you have gold lying in your households investing in the revamped gold deposit scheme can be an ideal option because of the following reasons:

  • Secure storage with returns: The most common practice that most of us do is keeping our yellow metal in the bank lockers as they are considered safe in banks. These metals are then used during times such as weddings or in need of some finance. However, while gold may be safe in your bank lockers, the negative side is that you have to pay fees/ charges to secure your gold. On the contrary, if you invest in a gold monetisation scheme, you can easily store your gold safely and can also earn returns at the time of maturity of the scheme.
  • Encashing your gold: Investing in a gold monetisation scheme means that you can encash the value of your gold when it appreciates. Thus, the ideal gold can be utilised in the best possible way.
  • Flexibility: To invest in a gold monetisation scheme, you don’t need a specific form of gold and can invest in gold bars, coins or jewellery. Also, there is no maximum limit of the value of gold that you can invest in the scheme.
  • Tax benefits: You can earn tax benefits on the interest earned in the gold monetisation scheme as it is exempted from under both income tax and wealth tax.

Investing in gold monetisation is a good option to make productive use of your idle gold lying in households or bank lockers. Still, one must remember that they won’t get their precious metal in the original form as the gold is returned either in the form of coins or bars or in rupees.

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How do you monetize gold?

You can monetize your gold by depositing it with a bank as a term deposit. This deposit of gold with a financial institution to earn interest and to secure the gold is the gold monetisation scheme.

How does gold Monetisation scheme work?

A gold monetisation scheme works similar to how a term deposit functions. Just as one deposits their funds with a bank to earn interest over a fixed period, similarly, as per the gold monetisation scheme, one deposit their gold in any physical form with the bank, that is in the form of jewellery, bar or coin for a fixed period, and can earn interests on the deposited gold. The interest earned in this case is the appreciation of the weight of the gold.

Is gold Monetisation scheme a success?

Gold monetisation is a recently launched scheme by the Government of India, and thus has a long way to set its foot in the markets. However, it is considered a good way for people to add value to their gold investments.

Which gold scheme is best?

Gold monetisation scheme is a good way that can help people mobilize their gold and earn returns, that may prove beneficial in the long run. The scheme provides the flexibility to make small, medium and long term investments.

What is the gold scheme by Modi?

The Narendra Modi Government launched the gold monetisation scheme in the year 2015, to mobilize the ideal lying gold in the Indian households. The scheme enables productive use of the gold within the economy that is equally beneficial for the gold owners.

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