Home / Money / Personal Finance /  Gold fixed deposit (FD): Tenure, interest rates and features explained

One of the major challenges that investors in physical gold face are safe storage. Although, they can keep their gold in bank lockers. For that, the banks levy certain charges. But are bank lockers really safe? Though the Deposit Insurance and Credit Guarantee Corporation (DICGC) provides a cover of up to 5 lakh for your bank deposits, there is no insurance for the contents kept in a bank locker.

So, how about earning some interest on your idle gold?. You can deposit the idle gold in an RBI designated bank and earn interest on the same. This facility is available under RBI’s Gold Monetisation Scheme.

“Make your gold work for you! Deposit your unused jewellery and other Gold assets in Gold Monetisation Scheme and EARN!" Punjab National Bank said in a tweet.


Gold Monetisation Scheme

The Gold Monetisation Scheme (GMS) is intended to mobilize gold held by households and institutions of the country and to facilitate its use for productive purposes and in the long run, to reduce the country's reliance on the import of gold. The customers can deposit their idle gold under GMS which will provide them safety, interest earnings and a lot more.

Features of the Gold Monetisation Scheme

  • A resident Indian individual of an institution can invest in Gold Monetisation Scheme, which can also be called as gold FD as this is just like a bank fixed deposit where you deposit your idle gold with the bank and at the maturity, you get gold or the value of gold back along with the interest earned on the same.
  • Gold FD can be opened in joint names as well.
  • Gold is accepted in the form of raw gold i.e. gold bars, coins, jewellery excluding stones and other metals.
  • An investor can deposit a minimum of 10 grams of gold. There is no maximum limit.
  • Investors can choose any term between 1 and 15 years.

Gold FD interest rates

The interest rate you earn on your deposit depends on the tenure. 

Short-term deposits

1 year 0.50%

Above 1 year up to 2 years 0.60%

Above 2 years up to 3 years 0.75%

Medium-term deposits, you can earn up to 2.25% per annum.

Medium-term deposits, you can earn up to 2.50% per annum.

If you receive the payment annually, you will get a simple interest (as on 31 March) on your deposits. If you receive it on maturity, the interest rate will be cumulative (compounding annually). You need to choose the mode of payment at the time of deposit.



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