Gold monetisation scheme: Withdrawal allowed in cases of depositor’s death

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Premature withdrawals of deposits made under the gold monetisation scheme can be allowed even during the lock-in period in cases of the depositor’s death, the Business Standard has reported. There will, however, be foregoing some interest, says the report, quoting the Reserve Bank of India (RBI).

Premature withdrawal is allowed but not before the lock-in period of three and five years, depending upon the duration of the original scheme, according to the report.

The lock-in period is three years in the medium-term gold deposit scheme (MTGD). No interest will be paid if the deposits are withdrawn within six months, says the report. If deposits are withdrawn six-months-one- year period, the applicable rate would be the original interest rate minus 1.25%. It would be 1% if deposits are withdrawn in a one-year- to two-year period; the deduction will be 0.75% for withdrawals during the two-year to three-year period

Gold monetisation scheme (GMS) was launched by the government in 2015. The main intention behind this scheme was to put the idle gold stored by individuals in their homes and bank lockers to productive use. With the world’s second-biggest bullion consumer, India imported 121 tonnes of gold in August this year. Under GMS, one can deposit idle gold in a bank and earn interest on the same. In nature, GMS works like a fixed deposit in gold. One can earn up to 2.5% interest per annum under this scheme. The interest rates will depend on the tenure of the GMS one opts for. You may also call it a gold fixed deposit. The scheme is offered by RBI-designated commercial banks such as the State Bank of India (SBI), HDFC Bank, ICICI Bank, PNB, etc. The minimum deposit of gold starts from 10 grams with no limit on the maximum deposit.

Interest earned under GMC is exempt from the capital gains tax, wealth tax and income tax.