SBI gold monetization scheme: Make the most of the idle gold jewelry that lies in your homes. This jewelry will bring you good returns. The value of your unused or obsolete jewelry can be unlocked via the Gold Monestization Scheme (GMS). Many banks offer this service, including the largest public sector bank in India, the State Bank of India (SBI).
SBI accepts the gold deposits under this system on behalf of the Government of India. The deposits can also be made for an interrupted period of time.
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SBI Gold Monetization Scheme Features
- SBI GMS offers customers the opportunity to earn interest income from their unused gold holdings.
- Short Term Bank Deposit (STBD) – The term is 1 to 3 years
- Medium Term Government Deposit (MTGD) – tenure 5-7 years.
- Long Term Government Deposit (LTGD) tenure 12-15 years.
- The minimum deposit requirement is 30g (gross) while the maximum amount is unlimited.
- Nomination facility for deposits in individual names available in individual capacity.
For STBD, the current interest rates are as follows:
1. The interest rate is 0.5 percent pa for one year
2. The interest rate over 1 year and up to 2 years is 0.55 percent pa
3) Over 2 years and up to 3 years, the interest rate is 0.60 percent pa
Not cumulative (on March 31st) each year or cumulative (when due) interest when due. The principal and interest on STBD are in gold. When due, interest is also paid for interrupted periods.
The current interest rates for MTGD are 2.25 percent pa
For MTGD and LTGD, the principal amount is gold. However, interest is paid annually on March 31st in INR or the accumulated interest when due. Interest income is paid on the due date.
The gold value in rupees earns interest at the time of deposit. The depositor has the option of receiving simple interest annually on maturity or accumulated interest on maturity (annual compounding). The option to be exercised at the time of the deposit.
What the expert says:
Unused jewelry that is very old is not useful and does not bring the desired return, so this scheme can be used, said Jitendra Solanki, an expert in personal finance matters.
However, he warned that gold in the form of coins or bars would not generate such high returns if used under the GMS system.
He said that this system has a lock-up period, so one has to consider the length of time that the unused gold will be deposited with the bank.
He said this scheme is broadly applicable to those who have large amounts of gold worth several crores. For such people, the interest income might look more tangible.
