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What Is the Gold Monetisation Scheme (GMS)?

By Staff

Gold Monetisation Scheme (GMS) was launched in 2015. The GMS replaced the old Gold Deposit Scheme, 1999. However, individuals holding the outstanding under the Gold Deposit Scheme were allowed to keep till maturity unless the depositors prematurely withdraw them.


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What Is the Gold Monetisation Scheme (GMS)?

This is like a gold savings account, where you earn interest on your deposits made in gold. It helps you gain the benefits of interest along with price appreciation of the yellow metal.

Who are eligible?

Individuals, HUF, Trusts including Mutual Funds/Exchange Traded Funds registered under SEBI are eligible to make deposits under the scheme.

Types of Deposits:

The designated banks will accept gold deposits, there are three types of deposits available.

  • The Short Term Bank Deposit (STBD) (1-3 years)
  • Medium Term Government Deposit Schemes (5-7 years)
  • Long-Term Government Deposit Schemes (12-15 years)

As names suggest, short-term deposits are made with designated banks only. There will be provision for premature withdrawal subject to a minimum lock-in period and penalty determined by individual banks.

For medium and long-term deposits, however, the minimum lock-in period will be 3 years and 5 years respectively.



The minimum deposits to be made at a time will be 30 grams of raw gold (bars, coins, jewellery excluding stones and other metals) equivalent to 30 grams of gold of 995 fineness. There is no maximum limit for deposit under the scheme.

Where to deposit your gold for Gold Monetisation Scheme?

You need to open a gold deposit account with designated banks and deposit your gold with the designated Collection and Purity Testing Centres (CPTC) designated by the Reserve Bank of India (RBI) to the bank.

The bank will then credit the STBD or medium or long-term deposit accounts with the amount of 995 fineness gold as indicated in the advice received from CPTC, after 30 days of receipt of gold at the CPTC, regardless of whether the depositor submits the receipt for the issuance of the deposit certificate or not.

You will have to pay service charges to banks like gold purity testing charges, refining, storage and transportation charges etc. for Medium and Long-term Deposits. Large depositors can also choose to directly deposit it with refiners.

Interest Income

Interest will start accruing from the date of conversion of gold deposited into tradable gold bars after refinement or 30 days after the receipt of gold at the CPTC or the bank's designated branch.

The interest earned on these deposits will be decided by the Central Government, the current rate is 2.25% per annum for medium-term deposit and 2.50% on long-term deposits.

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