Pradhan Mantri Gold Monetization and Bond Scheme
Gold Monetization Scheme
Gold Monetization Scheme is a gold deposit scheme launched by Pradhan Mantri on 5th November 2015. It is targeted to mobilize unused gold hold by families and institutions and make its investment vehicle. The scheme aims to turn gold into the productive asset. It also aims at reducing gold import and improves market liquidity.
Deposit under Gold Monetization Scheme
Any Indian resident can invest in Gold Monetization Scheme. 2015. It is a secured deposit scheme and you earn interest on it.
Gold Monetization Scheme allows you to deposit gold for short, medium and long-term gold deposits. The tenure for Short Term Bank Deposits is for 1-3 years, Medium term is for 5 -7 years and long-term is for12-15 years respectively. The Short Term Bank Deposit is accepted by the bank on its own, whereas Medium and Long-Term Government Deposits are accepted by banks on behalf of the Government of India.
Main Features of Gold Monetization Scheme
The Gold Monetization Scheme comes with the following features:
- You can deposit minimum 30gm of gold that includes gold ornaments, bar, coin etc. There is no maximum limit to it.
- You can make premature withdrawal once the lock-in period is over. You will have to pay penalty for it.
- It offers 2.5% per annum interest on the deposit.
- You can deposit in Gold Monetization Scheme in any designated commercial bank.
- The gold deposited in Gold Monetization Scheme can be redeemed in either rupee as well as gold at the current gold rate.
- To make the scheme more attractive, the Government has made changes to the scheme and made it tax-free.
- There is no capital gain tax charged too.
Benefits offered by Gold Monetization Scheme
- An investor in the Gold Monetization Scheme enjoys several benefits. Some of the benefits are:
- You earn interest on gold which is lying idle and unproductive and it offers the value-added saving.
- It helps the Indian economy as it reduces gold import.
- The scheme is flexible as gold can be invested for varied terms. You can make the withdrawal if you need.
- A small amount of gold such as 30gm can be deposited and there is no cap on it.
Gold Bond Scheme
Investors can invest in Gold Bond Scheme and earn returns which are linked to gold price. It offers the same benefits as physical gold such as can be sold, traded or used as collateral for loans. There are several types of gold bonds offered under the scheme. The bonds are issued by Reserve bank of India.
How does it work?
- You invest in rupees at the current international price of the gold. You get 2% or little more per annum interest on it. After the investment period, you get the latest price of the gold. You will have to pay capital gain as per the rule.
- Individuals, trusts, charitable institutes, educational institutes etc can invest in the scheme. A parent/guardian can invest on behalf of the minor too.
- Minimum investment for an individual can be of 2 grams and maximum limit is 500 gram.
- The gold can be purchased in denominations of 5, 10, 50, 100 grams.
Bonds are issued by scheduled commercial banks.
- The income on the gold bond is not liable to tax.
By investing in Gold Monetization Scheme and Gold Bond, you not only earn interest but also contribute towards reducing imports, nation-building and strengthening the economy of India.
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