Many households in Kerala keep gold ornaments in bank lockers or home vaults. While secure, this gold does not earn interest. The government's Gold Monetisation Scheme (GMS) offers an alternative, allowing you to deposit gold with authorized banks and earn interest. We outline how the scheme works.
What is the Gold Monetisation Scheme?
Launched by the Government of India, the GMS allows individuals to deposit gold (in the form of jewellery, coins, or bars) with commercial banks. The gold is melted down, assayed, and credited to your deposit account, earning interest over a selected term.
Key Features of GMS
- Minimum Deposit: The minimum deposit weight is 10 grams of gold.
- Deposit Categories:
- - Short-Term Bank Deposit (STBD): 1 to 3 years.
- - Medium-Term Government Deposit (MTGD): 5 to 7 years.
- - Long-Term Government Deposit (LTGD): 12 to 15 years.
- Interest Rates: Typically ranges from 2.25% to 2.50% per annum for medium and long-term deposits, paid in gold weight or equivalent currency.
The Process of Depositing Gold
- Visit a Collection and Assaying Centre (CPTC): Bring your gold ornaments to an authorized center.
- Purity Assessment: The gold is weighed, melted, and verified for purity.
- Receipt Issuance: You receive a certificate indicating the net gold weight (in 995 fineness).
- Account Activation: Present the certificate at your bank branch to activate the gold deposit account and begin earning interest.
Pros and Cons for Kerala Households
Advantages - Earn Interest: Turn idle gold into an interest-earning asset. - No Locker Fees: Avoid bank locker rental costs. - Tax-Exempt Earnings: The interest earned and capital gains are exempt from Income Tax and Capital Gains Tax.
Disadvantages - Gold is Melted: The deposited ornaments are melted down, meaning you cannot get the original jewelry items back. You receive redemption value as gold coins, bars, or cash. - Not Ideal for Emotional Heirlooms: Do not deposit jewellery of high sentimental value.
Check Today's Rates
The GMS offers a way to generate returns on idle gold assets. Monitor daily gold rates on RateTracker.in to stay informed of market prices.
