- Date : 03/05/2022
- Read: 5 mins
Most of the gold we have in our Indian household always sits idle. Since its inception, GOI has always encouraged gold purchase and putting it to the proper use. In accordance to that, the GOI has launched several digital gold schemes.
Digital gold schemes ho help you make the most of your gold investment
The love that Indians have for gold can not be bracketed into one type. The reverence we have for gold is precious. In India, gold holds cultural and religious significance. No celebration is ever complete without gold. Gold has been consistently delivering stellar returns. Also another terrific thing about gold is that the government and gold shops encourage people to buy and invest in gold by continuously bringing out new schemes from time to time.
In India, over 20,000 tonnes of gold is sitting idle. Every year about 1,000 tones of gold are imported. The GOI has launched some digital gold schemes to put gold to productive use. The primary aim of establishing these digital gold schemes was to reduce the whopping import. Even due to these schemes, it is estimated that the demand for physical gold will decrease with time.
Gold Monetisation Scheme
When 2015 the Union Budget was presented, the government declared that they would recreate and revise the existing Gold Monetisation Scheme and Gold Deposit Scheme of 1999. At that time, the Indian gold stock was estimated to be around 20,000 tonnes. This scheme ensured the mobilisation of gold and made gold a productive asset in India.
Under the Gold Monetisation Scheme, you can create a gold savings account to deposit your physical gold and earn a hefty interest. Intertest was based on the weight and appreciation value of the gold. The minimum deposit limit is 30 grams in any form. However, there is no maximum deposit limit.
There are three deposit tenures, completing which an investor can earn a wholesome profit.
- Short Term Bank Deposit: It is for one to three years.
- Medium Term: It is of five to seven years.
- Long Term Government Deposit: It is for twelve to fifteen years.
At the end of their tenure, an investor can either redeem their gold in physical form or equivalent cash. So, even your idle gold will give you profit in this way. Cool, isn’t it?
The Gold Monetisation Scheme consists of the revised version of two pre-existing schemes.
Revamped Gold Deposit Scheme
Under the R-GDS, gold-certified by BIS is accepted at Collection and Purity Testing Centres (CPTC). The certificate of deposits is issued by the bank based on 999 fineness. All the residents of India are eligible for the R-GDS.
Revamped Gold Metal Loan Scheme
When Gold Metal Loan Scheme (GMLS) was first launched in 1988, it was not a hit among the Indians as they failed to recognise its value. Later the GOI revamped it, and under the R-GML, a gold metal loan account, designated especially for jewellers, was opened by the banks, denominated in grams of gold. After sanction, jewellers would receive physical gold from refiners. Then, a required entry would be made in the jewellers’ gold Metal Loan Account by the bank, and interest would be charged.
Indian Gold Coins Scheme
GOI launched this digital gold scheme in 2015. The Indian Gold Coins scheme is considered the first national gold coin scheme with the image of the Ashoka Chakra minted on one side while the other side has the picture of Mahatma Gandhi. The aim behind launching the Indian Gold Coins scheme was to promote investment in this yellow metal. Currently, the coins are available in the denomination of 5gms, 10gms, and 20gms. These gold coins have an easy liquid aspect and can quickly be sold to earn money in times of need. The Indian Gold Coins are of 24 karats and 999 fineness. Even the Indian gold Coins are hallmarked by BIS. The Indian Gold Coins are available at selected MMTC outlets.
Sovereign Gold Bond Scheme
Under the Sovereign Gold Bond Scheme, the distribution of physical gold is kept under control. The benefits of gold bond and physical gold are the same. Therefore, instead of buying physical gold, the GOI encourages investors to purchase gold bonds that are available in paper and demat form. The SGBS is transparent and safe. These gold bonds can either be purchased from BSE or RBI. Investment is as low as 1gram. The tenure for SGBS is eight years and has an interest rate of 2.50% per annum.
As Indians, we know the value of investing in Gold. Although physical gold is something that we all love to buy, and old-school Indians consider it the only and correct form of gold to invest in, in this 21st century, digital gold is a buzz. Investing in digital gold is less troublesome than investing in physical gold. There are many online platforms to buy digital gold.
The yellow metal is blooming and continues to bloom in the Indian market. The digital gold schemes launched by GOI channelise the unutilized gold reserve in the right direction.