Interested in financial products

Gold Deposit Scheme By All Banks


Gold Deposit Schemes also referred to as gold schemes or gold savings schemes, is an investment vehicle that enables investors to deposit their gold with a jeweller or bank and earn returns in the form of a higher quantity of the yellow metal. This return can be a lump sum amount at the year-end or a monthly payment of a pre-determined amount, which can be redeemed in cash or gold. Gold schemes are designed to control the dependency on imported gold, maintain a stable foreign exchange and mobilize the yellow metal. Gold schemes are offered by banks and jewellers, who offer varied features and benefits on their schemes.

Gold schemes include Sovereign Gold Bond (SGB), the Indian Gold Coin Scheme (IGC) and the Gold Monetisation Scheme (GMS). Any individual or organisation can invest 2 units or 2 grams of gold in these schemes coming with a tenure of 8 years

Gold Deposit Scheme can be opted by any resident Indian who is:

  • Individual, single or jointly
  • Hindu Undivided Family
  • Trusts
  • Companies

Gold Deposit Scheme - Features & Benefits

The features of the benefits of this scheme are as follows:

  • Gold can be deposited in the form of gold bars, coins, jewellery in scrap from.
  • The minimum quantity for deposit is 500 grams and there is no upper limit.
  • The period of deposit can be 3 years, 4 years and 5 years.
  • Gold Deposit Certificate will be issued by Nodal branch after it is melted, assayed and minted at India Government Mint.
  • The certificate issued will be for pure gold contents.
  • Maximum of 5 multiple certificates can be issued.
  • Gold Deposit Certificate will be sent to the depositor within 90 days from the deposit of the gold.
  • Nomination facility is available for deposits in single names in an individual capacity.
  • The scheme can be transferred by endorsement and delivery. The transfer has to be noted with the Nodal Branch.
  • On the date of maturity, you can take repayment of principal in gold or equivalent rupees as on the date of the maturity.
  • Premature payment is permitted after completion of a 1-year lock-in period, but a penalty is applicable on the interest rate.
  • The scheme can be renewed any time after its maturity provided it is for a future date.
  • You can avail the loan facility at any SBI branch. Loan amount of up to 75% of the notional value of gold can be taken as loan.
  • This scheme provides tax benefits as you can claim it under exemption from Income Tax, Wealth Tax and Capital Gains Tax.

Gold Deposit Schemes Offered by Banks

Gold Schemes were first launched after Budget 2015 with the objective of encouraging Indian citizens to deposit idle gold in banks and avail returns after the maturity term. Banks can further loan it to jewellers or use it for other purposes. The depositor has to pay interest to the bank for the safekeeping of gold deposits. Banks can make this gold deposit available to jewellers. The idea is to minimize dependency on foreign gold reserves and also stabilize the country’s foreign exchange.

Three new gold schemes have been launched by Prime Minister Narendra Modi - Gold Monetisation Scheme, Sovereign Gold Bond Scheme and the Gold Coin and Bullion Scheme.

  • Gold Monetisation Scheme (GMS) – This scheme was introduced as a substitute for the existing Gold Deposit Scheme, 1999. Under this scheme, gold can be deposited at the collection centres or purity testing centres that are authorized by the Bureau of Indian Standards. The principal and accrued interest under this gold scheme are denominated in gold. The tenure extends to 1 - 3 years for short term, 5 to 7 years for medium-term and 12 to 15 years for the long term. This gold scheme has a minimum lock-in period and penalty, as determined by the bank, and is applicable on premature withdrawals.
  • Sovereign Gold Bond Scheme (SGB) –RBI issues gold bonds on behalf of the Government of India under the sovereign gold bond scheme. Gold bonds are measured in multiples of gold grams. The minimum limit is 1 gram. An individual can purchase at least 2 grams of gold bonds and up to 500 grams of gold bond in an annual year. The maximum tenure of investing in the bonds of this gold scheme is up to 8 years. This gold scheme offers you the flexibility to exit it from the fifth year.
  • Gold Coin and Bullion Scheme – This is a new initiative of the Government of India in issuing gold coins of 5 grams, 10 grams and 20 grams.

Features and benefits offered by gold schemes of banks are as follows:

  • Minimum gold deposits under gold schemes is 30 grams.
  • Gold can be deposited in all forms including jewellery, bars and coins.
  • There are 331 collection centres for testing and deposition of the yellow metal.
  • Gold schemes are available on varied tenures - the short period between 1 year and 3 years, medium period between 5 years and 7 years and long term of 12 years to 15 years.
  • Different interest rates are applicable on different tenures.
  • The penalty is applicable on redeeming the accumulated gold before the completion of the maturity term.
  • The value of the gold deposited determines the rate of interest and is payable in the form of cash.
  • Rate of interest for short term gold deposits are determined by banks, while interest rate on medium and long-term gold deposits is set by the Government of India.
  • Redemption on short term deposits can be availed in the form of gold or cash. However, redemption on medium and long-term deposits can be availed only by cash.
  • Interest on deposits made towards gold schemes is exempted from taxes.
  • The deposited gold can be used by the bank as per its discretion like for the purpose of auctioning, RBI Gold reserves, etc.
  • Short term deposits towards gold schemes can be offered as a loan to jewellers.
  • A Gold Metal Loan Account can be opened by jewellers when the yellow metal is denominated in grams.

Gold Deposit Schemes Offered by Jewellers

Some of the most popular gold schemes offered by jewellers are:

1. GRT gold schemes - GRT Jewellers offers competitive features and benefits on its gold schemes. GRT Golden Eleven Flexi Plan details are mentioned here:

Features and benefits

  • Under the scheme, a pre-fixed monthly instalment amount needs to be paid for 11 months. An advance monthly instalment of at least Rs. 500 is applicable on investments in this gold scheme.
  • One can buy jewellery for the pre-decided value only after a month from the date of the last instalment payment. Exclusions to the jewellery products that can be purchased are vintage jewellery, uncut diamonds, emerald, ruby, silver, uncut diamonds, platinum, etc.
  • Return on investment can be availed only in the form of gold since cash refund is not available.
  • Any kind of default on instalment payments will make you eligible for a ‘discount on purchase’ after all the instalments have been paid.
  • Defaulting on payments between the 8th and 10th month will make you eligible for a claim with a discount of 60% of a monthly instalment amount.

2. GRT Golden Seed Savings Scheme

Features and benefits

  • Under the scheme, instalment payments have to be made before the 10th day of every month for a period of 15 months.
  • Instalments towards this gold scheme can be paid only at one of the jewellery showrooms from where it has been purchased, but the gold can be redeemed from any of the showrooms at the prevailing value of gold.
  • Instalments under the scheme are fixed and the date of maturity cannot be altered.
  • In case a cheque has been dishonoured, the existing gold rate on the date of realisation is considered. Defaulting on payments will extend the date of maturity by the number of months for which the default(s) has occurred.
  • Gold is credited to your account as per the existing rate after the monthly instalment payment is made.
  • You can redeem the entire gold credited to your account after the monthly instalment payment. This implies that your monthly returns are secured from volatile capital market conditions. Refund in the form of cash is not applicable.
  • If the weight of gold jewellery purchased exceeds the accumulated amount, the difference amount will have to be borne by the investor.
  • Wastage of more than 18% on the accumulated gold will have to be borne by you.

3. Gold Schemes from Kalyan Jewellers – Some of the key features and benefits of the ‘purchase advance scheme’ offered by Kalyan jewellers are as below:

  • Under the scheme, gold can be purchased through advance payments starting from a minimum of Rs. 500 to a maximum of Rs. 40,000 based on the jewellery selected.
  • Kalyan jewellers offers competitive rates and discounts on this gold scheme.
  • In case of defaults on monthly instalments, the making charges are increased by 0.25% as penalty.
  • In case you want to close the gold scheme before the completion of 11 months, you can buy any gold jewellery from any Kalyan Jewellery store, as per the existing gold rate. No discounts will be applicable on such purchase
  • The inability to pay the balance amount by the 12th month will lead to the cancellation of the purchase. The payments made earlier will be refunded through a demand draft sent to the address registered with them at the time of enrolment. Cash repayment is not applicable.
  • The required documents include a copy of the Photo ID’s such as PAN card, Aadhaar, Passport and Driving License. The original document proof has to be furnished at the time of opening and closing the gold scheme.
  • The person in whose name the gold scheme will be opened should also be present at the time of closing the scheme.
  • This is a convenient long-term investment instrument for expenses related to your child’s wedding or higher education in the future.

4. Malabar Gold & Diamonds Smart Buy Scheme - Under the Smart Buy Scheme, the benefits offered on the ‘In stock’ products are:

  • There is a visible difference in the original cost of the jewellery product selected, its delivery date and availability status and the same information after you click on the ‘Smart Buy’ option.
  • Products that are ‘Out of stock’ get especially manufactured on priority when you select the ‘Smart Buy’ option for a product that is currently not in stock. Your order gets processed post that.
  • The price of the final product may vary depending on its weight and prevailing price of gold. The jeweller’s customer care team gets in touch to inform you about the revised weight and price of the product that you want to purchase.
  • In case you want to customize your jewellery like rings, bangles, bracelets, neckpieces, etc. from products that are in stock, you can get your desired size with the ‘Smart Buy + Customize Option’. You can also avail this benefit without making additional payments.

5. Tanishq Golden Harvest Scheme – Some of the key features and benefits of this scheme are as follows:

  • The scheme is available in two variations of 6 months and 10 months
  • Under the scheme, you need to make a monthly payment for 10 months or 6 months, according to your chosen term, which is redeemable after the maturation of the scheme.
  • The scheme also offers a special discount based on the deposited amount.
  • This scheme also offers you the flexibility to deposit an amount every month based on your financial position with the minimum payable amount being Rs. 2,000 only.
  • You can avail up to 75% discount on the purchase of gold jewellery through this scheme.
  • The gold scheme account will be closed within 235 days from the date of its issuance if you have chosen the 6-month term, and within 385 days in case of the 10-month term.
  • This gold scheme is applicable only after the purchase of gold and diamond jewellery only, and cannot be availed on gold and silver coins.
  • Defaulting on payments for more than 2 months leads to the cancellation of the gold scheme. The principal amount will be refunded.
  • At the time of maturity of the term, the amount will be redeemed within 235 days in case your scheme is of 6 months, and 385 days for the 10-month scheme.

6. Tanishq Swarnanidhi Scheme – The key features of this scheme are:

  • There is no restriction on the number of instalments that can be made during the term of the gold scheme.
  • Instalment payments range from a minimum of Rs. 3,000, and additional payments are possible in multiples of Rs. 1,000.
  • In case the price of gold increases at the time of redemption, the individual will be able to avail a larger corpus for making his/her purchase.
  • Number of grams of gold you will be eligible for after the maturity of the then gold scheme is determined by the amount that you have deposited every month.
  • The returns in the form of gold can be redeemed after the maturity of the term and as per the existing gold rate. Redemption is also possible in the form of cash, as per the existing gold rate.
  • Redemption has to be claimed within 10 months of enrolling for the gold scheme. On-redemption within 10 months, the amount will be refunded in the form of cash without any benefit or interest.
  • Redemption can be availed only on gold and silver jewellery and not gold and silver coins.
  • The redeemable returns under this gold scheme should be of the equivalent or higher value than the pre-booked weight of gold.


1. What are the best gold schemes from jewellers that I invest in?

Some of the best gold schemes from popular jewellers that you can choose from:

  • Tanishq’s Golden Harvest Scheme
  • Kalyan Jewellers Purchase Advance Scheme
  • Malabar Jewellers Gold and Diamonds SMART BUY Scheme
  • PNG Jewellers Gold Rush Scheme
  • GRT Jewellers Golden Eleven Scheme

2. In what form will the depositor get back his gold at maturity?

If the depositor opts for redemption in the form of gold, he will get back physical gold at maturity in the form of bullion.

3. What are the government-backed gold schemes?

The following are the gold schemes introduced by Prime Minister Narendra Modi at Budget 2015:

  • Gold Monetisation Scheme
  • Sovereign Gold Scheme
  • Gold Coin and bullion Scheme

4. Are joint deposits allowed?

Yes. Joint deposits of two or more eligible depositors are allowed under the scheme.

5. How will the principal and interest be denominated at the time of redemption?

For Short Term Bank Deposit (STBD), redemption can either be in rupee equivalent or gold. Whereas, for Medium and Long -Term Government Deposit (MLTGD), redemption will be only in INR equivalent of the value of gold as per the then prevailing price of gold.

End Note

Gold deposit scheme is like a gold savings account. You would generally keep your gold without any security at home or store it in bank lockers by paying a maintenance fee. But instead of that, you could keep your gold in any form in a Gold deposit Scheme account and earn interest as the price of the precious metal goes up.

×Thank you! Your comment will be reviewed and posted shortly.

Write a review

CreditMantri will never ask you to make a payment anywhere outside the secure CreditMantri website. DO NOT make payment to any other bank account or wallet or divulge your bank/card details to fraudsters and imposters claiming to be operating on our behalf.