Gold Monetisation Scheme: Deposit gold jewellery, other assets to EARN - check eligibility, interest rate, repayment... MORE DETAILS

Gold can be found almost in every Indian household. Pople buy gold not only for gifting but also to use it in times of financial crisis as gold jewelleries, bars and coins can be deposited with banks in order to earn attractive interests.

Punjab National Bank (PNB) on Wednesday tweeted, "Make your gold work for you! Deposit your unused jewellery and other Gold assets in Gold Monetisation Scheme and EARN!."

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The Gold Monetisation Scheme (GMS) is intended to mobilise gold held by households and institutions of the country and to facilitate its use for productive purposes and in the long run, to reduce country’s reliance on the import of gold.

Make your gold work for you!

Deposit your unused jewellery and other Gold assets in Gold Monetisation Scheme and EARN!

For more information, visit: https://t.co/oVbiS4t5Gs#GoldMonetisation pic.twitter.com/kRJaQHebJw

— Punjab National Bank (@pnbindia) August 18, 2021

Here is all you need to know about the Gold Monetisation Scheme:

1. Purpose: The purpose of the scheme is to mobilize the idle gold in the country and put it into productive use and to provide the customers an opportunity to earn interest income on their idle gold holdings.

2. Who is eligible to make a deposit?

Resident Indians of the following categories are eligible to make deposits:

Individuals, HUFs, Proprietorship and Partnership firms, Trusts including Mutual Funds/Exchange Traded Funds registered under SEBI (Mutual Fund) Regulations, Companies, Charitable institutions, Central Government, State Government or any other entity owned by Central Government or State Government.

It can be noted that joint deposits of two or more eligible depositors are also allowed under the scheme and the deposit in such case shall be credited to the joint deposit account opened in the name of such depositors.

3. Deposit quantity: The minimum deposit quantity is of 10 Grams while there is no maximum limit.

4. Types of deposit:

There are three types of deposits namely:

1. Short Term Bank Deposit (STBD) for a tenor of 1-3 years.

2. Medium Term Government Deposit (MTGD) for a tenor of 5-7 years.

3. Long Term Government Deposit (LTGD) for a tenor of 12-15 years.

It can be noted that the deposit under Medium Term And Long Term will be accepted by the Bank on behalf of the Central Government. Deposites can be accepted for broken period also.

5. Rate of interest and payment:

Short Term Bank Deposit(STBD): For a period of one year the rate of interest per annum (PA) is 0.50%, for above 1 year up to 2 years it is 0.60% and for above 2 years up to 3 years the interest rate is 0.75%.

It can be noted that the principal on STBD shall be denominated in gold and interest shall be calculated in Indian Rupees with reference to the INR value of gold at the time of deposit w.e.f 05.04.2021. On maturity Interest for broken period will also be paid.

For Medium Term Government Deposit the interest rate is 2.25 percent P.A while for Long Term Government Deposit it is 2.50 percent P.A.

In the case of MTGD & LTGD, the principal will be denominated in gold. However, the interest shall be paid in Rupees annually on 31st March or cumulative interest on maturity. Broken period interest is paid at the time of maturity. Interest is calculated on gold value in rupees, at the time of deposit.

Depositor will have option to receive payment of simple interest annually or cumulative interest (compounding annually) on maturity. The option to be exercised at the time of deposit.

6. Acceptance of gold: Gold is accepted in the form of raw gold i.e. Gold bars, Coins, Jewellery excluding stones and other metals. Customers to submit Application Form, Identification Proof, Address Proof and Inventory Form.

7. Repayment:

STBD:

Deposits prior to 05.04.2021:- Redemption of principal and interest at maturity will be, at the option of the depositor, either in Gold or in INR equivalent of the deposited gold and accrued interest based on the price of gold prevailing at the time of redemption.

Deposits w.e.f. 05.04.2021:- Redemption of the principal at maturity shall, at the option of the depositor, either in INR equivalent of the value of deposit gold at the time of redemption, or in Gold. Interest will be paid in Rupees calculated on the INR value of gold at the time of deposit.

MTGD and LTGD: Redemption of the principal at maturity shall, at the option of the depositor, either in INR equivalent of the value of deposit gold at the time of redemption, or in Gold. However, any pre-mature redemption of MLTGD shall be only in INR. Where the redemption of the deposit is in gold, an administrative charge at a rate of 0.2% of the notional redemption amount in terms of INR shall be collected from depositor.

8. Premature payment:

STBD: Premature withdrawal may be permitted. However, in case of premature withdrawal before completion of one year from effective date of deposit, no interest shall be paid. In all other cases, prepayment penalty of 0.15% shall be levied. Further, any premature redemption shall be in INR equivalent or gold at the discretion of the bank.

MTGD: Allowed to be withdraw any time after 3 years with penalty on interest.

LTGD: Allowed to be withdraw any time after 5 years with penalty on interest.

Interest penalty for MTGD & LTGD will be as per RBI Notification dated 9th Jan ‘2019.