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Types of Savings and Investment

Gold Monetization Scheme

The next type of investment scheme that we are going to talk about is also related to gold which is the ‘Gold Monetization Scheme.’


This scheme allows a person to earn interest on the gold one owns. To avail this scheme, one needs to deposit gold in physical form. Interest is earned on gold weight. One can get back the gold either in equivalence of 995 fineness gold or INR. Method of redemption needs to be mentioned at the time of making the deposit. The banks lend out this deposited gold to jewellers at some interest rate which is a bit higher than the interest paid to the customers. As little as 30 grams of gold can be deposited in this scheme. One can opt for this scheme for either 1-3 years, or 5-7 years, or 12-15 years.

How to avail this Scheme

One first needs to get the gold tested for purity in a gold collection and purity testing centre. A certificate of gold purity and gold content would be provided which needs to be produced in the bank. This gold will be melted and one would not get back the gold in the same form in which it had been deposited.

Interest Rate Mechanism

The interest paid is valued in terms of gold. 

For example, 1% rate of interest on 100 grams of gold would be 1 gram.

Tax Implications

The gains from this scheme are exempted from tax. 

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Units 22/23