The Gold Monetisation Scheme (GMS) is launched by the Prime Minister of India with an aim to help investors earn interest on their gold lying idle in bank lockers. Gold Monetisation Scheme works like a gold Savings Account which will earn interest on the gold that you deposit, based on the weight along with the appreciation in the value of gold.
Investors can deposit gold in any physical form – jewellery, bars or coins. This new gold scheme is a modification of the existing Gold Metal Loan Scheme (GML), Gold Deposit Scheme (GDS) and it would replace the existing Gold Deposit Scheme (GDS), 1999.
Gold Monetisation Scheme is launched with an idea to ensure mobilisation of the gold owned by the families and Indian institutions. It is expected that the Gold Monetisation Scheme would turn gold into a productive asset in India.
Generally, gold lying in bank lockers appreciates in value if the gold price goes up, but it doesn't pay a regular interest or dividend. On the contrary, you incur carrying costs on it (bank locker charges). The Gold Monetisation Scheme allows individuals to earn certain regular interest on their gold and also saves carrying costs. The minimum quantity of gold that a customer can bring is proposed to be set at 30 grams.
Under the Gold Monetisation Scheme, an investor can deposit gold for a short, medium and long-term period. The tenure for each term is as follows- Short Term Bank Deposits (SRBD) is of 1-3 years, Mid-term is between 5-7 years of tenure and Long Term Government Deposit (LTGD) comes under a tenure of 12-15 years.
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Both principal deposit and interest will be valued in gold. For instance, if a customer deposits 100 grams of gold and gets 2% interest, then, on maturity he has a credit of 102 grams.
Individuals willing to open an account can do so with a scheduled bank listed under the Reserve Bank of India. The documents which are required to open the account are same as those required for any savings bank account opening, for example, Know Your Customer (KYC) form along with valid ID proof, address proof and passport size photograph.
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