Earn Interest on Idle Gold: Government's New Scheme Ahead of Festive Season

New Delhi: The National Democratic Alliance government is planning a Diwali cheer ahead of the festival of lights, as it will start four Gold related schemes two days before Dhanteras on November 5. Buying gold and precious metals on Dhanteras is considered auspicious.  

Prime Minister Narendra Modi will inaugurate the gold monetisation scheme or GMS along with three other gold related Schemes.

Under the gold monetisation scheme, people can deposit a minimum of raw gold (bars, coins, jewellery excluding stones and other metals) equivalent to 30 grams. There is no maximum limit for deposit under the scheme.

The gold deposits will be accepted under short Term (1-3 years) Bank Deposit (STBD), as well as Medium (5-7 years), and Long (12-15 years). The short term deposits will fetch an interest of 2.25 per cent, while the long term deposits will get 2.5 per cent interest on current price of gold.

The aim of the scheme is to tap unused gold in private possession, bank lockers and deposit boxes lying idle. This will raise bank deposits and help them generate more liquidity.

The gold deposited under the scheme will be auctioned by Metals and Minerals Trading Corporation of India (MMTC) or any other agency authorised by the central government. The sale proceeds will be credited to the government's account with the Reserve Bank of India.

Under the Gold Coin Scheme, the National Emblem of Ashok Chakra engraved on one side of the gold coins for the first time. These gold coins will be available in denominations of five and 10 grams.

A 20 gram gold bar will also be available. Initially, 15,000 coins of five gm, 20,000 coins of 10 gm and 3,750 Gold bullions will be offered.

PM Modi will also launch the Sovereign Gold Bond, which will be issued by Reserve Bank India. These bonds will be denominated in multiples of gold with a basic unit of 1 gram, and their tenor will be for a period of 8 years with exit option from 5th year.