Generally every Indian household has some gold jewellery lying idle with them at their home. Also people tend to park their surplus in gold coins or gold jewellery as an investment.

But all of it has an added cost to it- the cost of storage and the risk that comes along. In this article, we will tell you how you can use the gold in your home to earn additional income without incurring extra cost.

In this article, I’ll explain you how you can earn extra income from your Gold through the Gold Monetisation Scheme without selling the Gold.

What is Gold Monetisation Scheme?

Gold Monetisation Scheme (GMS) is a scheme introduced by Government wherein people can earn from the physical gold lying in their homes. Under the Gold Monetisation Scheme, an individual is required to deposit the physical gold lying with him to the Govt and the Govt will pay you interest over and above the price appreciation.

You can deposit a minimum of 30gms of gold (in the form of bars, coins & jewellery), to a government certified centre called Collection and Purity Testing Centre (CPTC).

This centre will test the purity of your gold and give you a certificate for the same certifying the quantity of gold deposited by you. You can then take this certificate to a bank to open an account for the same.

This account will represent the amount of gold you’re holding with the bank on which you’ll earn interest up to 2.5% p.a. along with the capital appreciation of gold due to the change in price of gold. This interest is credited in terms of gold.

For example: If you have 100 gms of Gold Jewellery at your home, you can take this to the Govt. The govt will test the purity of the same and give you a certificate that you have deposited 100 gms of gold with the govt. You can redeem this 100 gm gold certificate at any time and you’ll get the value of gold prevailing at the date of sale in future. Thus, you would be getting the benefit of price appreciation.

Over and above the price appreciation, you would also get interest on this. When the interest is credited in your account it is credited in terms of gold, i.e. when the interest is 2.5%, the total amount in your bank account becomes 100+2.5=102.5 gms of gold.

The minimum tenure for the deposit is 1 year and the maximum is 15 years. It is classified in three broad categories basis the tenure of deposit, viz. Short Term- 1 to 3 years, Medium Term- 5 to 7 years, and Long term- 12 to 15 years. While the minimum deposit period is 1 year, customers still have the choice of premature withdrawal on the payment of a small penalty.

The interest rate on Short term is fixed by the bank and for the medium and long term it is 2.25% and 2.50% p.a. respectively. This interest earned will be credited on the due date, which you can withdraw periodically or at maturity.

Here you have the option to redeem your deposit in actual physical gold wherein you’ll be given pure gold bars or coins, or you can redeem it for money corresponding to the value of gold on the date of maturity or withdrawal. However the option has to be decided at the time of deposit and cannot be changed in future. In case of premature withdrawal the option lies with the bank whether to redeem in cash or gold.

How is Gold Monetisation Scheme beneficial to me?

Investing in the Gold Monetisation Scheme can be beneficial in many ways. We have listed four major points on how it can help you earn additional money.

What is the procedure of applying to Gold Monetisation Scheme?

The procedure to apply Gold Monetisation Scheme is very simple and can be broadly categorized in two parts,

1. Purity Verification and Deposit of Gold

2. Open a Gold Saving Bank Account


What is your expert opinion on Gold Monetisation Scheme?

In our opinion, Gold Monetisation Scheme is great for all those who want to earn additional income with the existing gold lying in the form of jewellery or coins. Since the minimum investment requirement is also low, even small investors can participate.

The flexibility of getting either gold or cash on maturity is an added advantage for people who don’t want trade their gold for cash. And the cash option is beneficial for those who want to save tax on gold transfers.