Indians have time and again proven their love for gold. Be it a wedding or festival, Indians craze for gold has hardly decreased.
However, this has been badly hurting the Indian economy, as imports increased which was weighing on the current account deficit. In order to strike a balance, the Narendra Modi government has launched three gold schemes. One of them is Gold Monetisation scheme.
Individuals usually prefer to keep gold in a safe locker which does not pay any interest, in turn, we need to pay yearly fees for the locker.
With Gold Monetisation scheme, one can hold the gold and earn interest on it.
The designated banks will accept gold deposits under the Short Term (1-3 years) Bank Deposit as well as Medium (5-7 years) and Long (12-15 years) Term Government Deposit Schemes.
As per RBI notification, interest rate on Medium and Long Term Government Deposit (MLTGD) are 2.25 percent and 2.20 percent, respectively.
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.
Here are 5 benefits of opening gold savings account:
1) The gold monetisation scheme earns interest for your gold jewellery lying in your locker. Even on broken jewellery or jewellery that you don't want to wear can earn interest for you in gold.
2) Redemption is possible in physical gold or rupees hence giving your gold purchase further earning an opportunity.
3) Earnings are exempt from capital gains tax, wealth tax and income tax. There will be no capital gains tax on the appreciation in the value of gold deposited, nor on the interest, you make from it.
4) Your gold will be securely maintained by the bank, which would be ideally lying at home or locker.
5) Coins and bars can earn interest apart from the appreciation of value.
- The metal will not be in the same form as it will be melted to check the purity and quantity.
- Means when you can earn interest, the gold cannot be reused in the same form.
- There can be some costs involved in melting and casting of gold which should be paid by you.