The Government of India offers a fixed deposit scheme in gold under the Gold Monetisation Scheme known as Revamped Gold Deposit Scheme (R-GDS). The scheme offers customers an opportunity to deposit their idle gold and earn interest on it. Another best part of the scheme is that all resident Indians are eligible to apply for it. The scheme is available at all banks and offers 3 types of deposits:
- Short Term Gold Deposit (STGD)
- Medium Term Gold Deposit (MTGD)
- Long Term Gold Deposit (LTGD)
Revamped Gold Deposit Scheme (R-GDS) Interest Rates
|Particulars||Short Term Gold Deposit (STGD)||Medium Term Gold Deposit (MTGD)||Long Term Gold Deposit (LTGD)|
At the discretion of banks
|2.25% p.a.||2.50% p.a.|
Note: The figures given in the table are indicative and are subject to change at the banks’ or RBI’s (Reserve Bank of India) discretion without prior information.
Revamped Gold Deposit Scheme (R-GDS): Other Features
|Tenure||5-7 years||12-15 years||1-3 years|
|Minimum Deposit Amt.||30 grams of gold in the form of bars, coins and jewellery (excluding stones and other metals)|
|Maximum Deposit Amt.||No Limit|
|Deposit Held||By the bank on behalf of the Central Government||In the bank’s books|
|Minimum Lock-in Period||3 years||5 years||At the bank’s discretion|
|Principal (Denomination)||Grams of 995 fine gold||Grams of 995 fine gold||Grams of 995 fine gold|
|Interest (Denomination)||Indian Rupees (as per gold’s value prevailing on the date of creation of deposit)||Indian Rupees (as per gold’s value prevailing on the date of creation of deposit)||Gold|
|Principal and Interest Redemption (Denomination)||P & I – Indian Rupees
P will be paid on the value of gold prevailing at the time of maturity
|P & I – Gold or Indian Rupees (option to be stated when placing the deposit)|
|Interest Payment||Annually on 31st March or Maturity (whichever is earlier)|
|Nomination facility||Available for deposits in single names in an individual capacity|
Revamped Gold Deposit Scheme (R-GDS) Benefits
Some of the benefits of Revamped Gold Deposit Scheme (R-GDS) are as follows:
- It helps in mobilizing gold that has been lying idle for long in households, trusts and other institutions in India.
- The mobilization of gold will also benefit the Indian gems and jewellery sector (a major contributor to India’s exports).
- It helps you earn interest on the unused gold, which will further add to your savings.
- It is hard to get bank lockers and when you do, applicable charges are levied. Opening a gold deposit account will eliminate this issue as the bank will keep it safe without a charge.
- The earnings on your gold deposits are exempted from income tax, capital gains tax and wealth tax.
- It is up to you to take either cash or gold on redemption. But the preference must be stated at the time of deposit.
- Mobilised gold will also cater to the requirements of RBI’s (Reserve Bank of India) gold reserves. This, in the long run, is expected to reduce India’s reliance on gold imports.