Prime Minister’s Gold Schemes

By BankBazaar | December 4, 2015

Prime Minister's Gold Schemes

Indians and their love for gold goes back a long way. In several households, rural as well as urban, gold is still considered an important component for investment. Considering the huge demand for gold in India, Prime Minister Narendra Modi recently launched three gold-related schemes. These schemes will not only help consumers invest in gold, but will also allow them to earn interest on gold that’s been lying around.

We list out the three gold schemes launched by Narendra Modi.

Gold Monetisation Scheme

The value of gold lying around in bank lockers will increase with years. But you can’t forget that you pay for the lockers. With the gold monetisation scheme, you can deposit your gold in designated banks and earn interest, along with the appreciation value.

You can choose from three terms: Short Term (1 to 3 years), Medium (5 to 7 years) and Long Term (12 to 15 years).

Gold can be deposited in any form under this scheme. Jewellery, gold bars, coins – everything is accepted. You have to verify its purity at the Collection and Purity Testing Centres.

All extra jewellery lying around in lockers will help you earn interest with the Gold Monetisation Scheme.

Sovereign Gold Bond Scheme

Sovereign Gold Bond is an alternative to buying physical gold. The bond will be issued to the buyer on receiving payment, and it will be linked to the price of gold. You can buy it in denominations of 2g, 5g and 10g. Investors can use the bond as collateral for loans and can even trade it at the stock exchange.

The Reserve Bank of India issues Sovereign Gold Bonds on behalf of the Government of India. These can be purchased in both, demat and paper form from designated banks and post offices.

The tenor of Sovereign Gold Bonds is 8 years, but you have the option to exit after the 5th year. Investors can opt for early exit by trading the bonds on exchange.

The first tranche for the sale of gold bonds is over. Stay tuned for more details on the next one.

Indian Gold Coin

Launched under the Gold Monetisation program, this scheme involves minting national gold coins, which can be purchased by consumers. The coin will have the Ashoka Chakra, India’s national emblem, engraved on one side and Mahatma Gandhi’s face on the other. This government promoted coin is one of its kind, as it’s the only BIS-hallmarked coin available in India.

Currently, this is available for sale only in a few Indian cities in 5g and 10g variants. An Indian gold bar of 20g too can be purchased. The price of these gold coins is lower than the market rate. It’s available for sale only at designated MMTC outlets.

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