SBI Revamped Gold Deposit Scheme: Earn interest at this rate; know eligibility, features

Gold can be found in almost every Indian household. The yellow metal can be used to earn interest and more by depositing it in banks. Revamped Gold Deposit Scheme (R- GDS) by the State Bank of India (SBI) is in the nature of a fixed deposit in gold. 

SBI customers can deposit their idle gold under R- GDS which will provide them safety, interest earnings and a lot more.

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It can be noted that gold is accepted in the form of raw gold that is gold bars, coins, jewellery excluding stones and other metals. Customers will have to submit Application Form, Identification Proof, Address Proof and Inventory Form, as per the information provided by SBI.

If you want to deposit your gold under the scheme, then here is what you need to know:

Eligibility:

Resident Indians including individuals, singly or jointly (as Former or Survivor); proprietorship and partnership firms; HUFs; 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 or state government are eligible to make a deposit.

Features:

1. To mobilize the idle gold in the country and put it into productive use.

2. To provide the customers an opportunity to earn interest income on their idle gold holdings.

3. Short Term Bank Deposit (STBD) : Tenure 1 to 3 years (Deposits can be accepted for broken period also).

4. Medium Term Government Deposit (MTGD): Tenure 5-7 years. The deposit will be accepted by the Bank on behalf of the Central Government (Deposits can be accepted for broken period also).

5. Long Term Government Deposit (LTGD): Tenure 12-15 years. The deposit will be accepted by the Bank on behalf of the Central Government (Deposits can be accepted for broken period also).

6. Deposit Quantity Minimum: 10 grams of raw Gold (bars, coins, jewellery, excluding stones and other metals). While there is no maximum limit for deposit quantity.

Rate of Interest:

Rate of Interest (STBD): The current interest rates are as under :

For 1 year: 0.50% p.a

Above 1 year up to 2 years : 0.55% p.a.

Above 2 years up to 3 years : 0.60% p.a.

The Principal on STBD a shall be denominated in gold. However, the interest on STBD shall be calculated in Indian Rupees with reference to the value of gold at the time of deposit.

Rate of interest on MTGD: 2.25% p.a.

Rate of interest on LTGD: 2.50% p.a.

In the case of MTGD and LTGD, the principal will be denominated in gold. However, the interest shall be paid in Indian 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

Repayment

STBD: Option to take repayment of principal either in gold or equivalent rupees as on the date of maturity.

MTGD and LTGD: Redemption of the deposit will be in Gold or INR equivalent of the value of gold as per then prevailing price of gold. However, 0.20 percent administrative charges will be levied in case of redemption in Gold.

Premature payment

STBD: Allowed after a lock-in period of 1 year with a penalty on applicable interest rate.

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 21.01.2016.