Gold Monetisation Scheme- to help receive better returns


Gold Monetisation Scheme- to help receive better returns

What is Gold Monetisation?

Gold Monetisation Scheme is the scheme where a citizen can deposit their gold in return for interest or dividend.

Why is this scheme brought into action?

Normally, people keep their gold in the bank locker which turns out to be beneficial when they sell that gold to the present higher prices but along with that they also incur bank locker charges i.e. carrying cost, it is charged for the time the gold is kept in the banks locker. This scheme helps citizens to avoid such charges and earn interest on the gold deposited.

The gold can be deposited in any physical form: jewelry, gold bars, coins. The gold deposited will earn interest on its weight and on the valuation of the metal. The gold that is returned is equal to its 995 fineness or in terms of Indian rupees. It depends on the choice made by the depositor. The option is given at the time of deposit.

Following are the terms involved for depositing:

The banks will accept gold deposits based on:

  • Short Term that goes on for 1-3 years’ Bank deposit and
  • Medium Term that goes on for 5-7 years’
  • Long term that goes on for 12-15 years’ Government Deposit Schemes.

Purity of Gold:

Checking the purity of gold is a very important task. To check the purity of gold is now made easier because of availability of collection and Purity Testing Centres. The gold will be tested in front of the people and they are given the certificate regarding the same on purity and gold content. This is done once people have made sure to deposit the gold in one of the deposit schemes.


  • The monetisation scheme helps people receive interest on the gold kept in their locker, the gold can either be a broken jewelry or jewelry that is not worn by the individual can also gain interest.
  • Gold coins and bars earn interest along the appreciation of value.
  • It is secured by the bank
  • The gold can be redeemed in physical form or rupees thus giving the gold purchase an earning opportunity.
  • Earnings are not included in capital gains tax, wealth tax, and income tax. Capital gains tax will not be applied on the appreciation value or on the interest.


Resident Indians [Individuals, HUF, Trusts including Mutual Funds/Exchange Traded Funds registered under SEBI (Mutual Fund) Regulations and Companies] can make deposits under the scheme. The opening of gold deposit accounts will be subject to the same rules regarding customer identification as are applicable to any other deposit account.

What happens with Gold at the bank?

The designated banks may sell or lend the gold accepted under the short-term bank deposit to MMTC for minting India Gold Coins and to jewelers, or sell it to other designated banks participating in the scheme.

Read about:DIGITAL INDIA: Digitally Empowered Society


It can be concluded that the Gold Monetisation Scheme is a useful scheme to get accurate returns on the gold deposited and help reducing unwanted charges. It also helps the citizens in increasing their savings on a long-term basis.


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