Gold Monetization Scheme (GMS) is a Government of India initiative regulated by the Reserve Bank of India (RBI), allowing individuals and institutions to deposit idle gold and earn interest on it. Currently, only the Short Term Bank Deposit (STBD) option with a tenure of 1 to 3 years is available for fresh deposits, making it a practical way to put unused gold to productive use.
Gold Monetization Scheme (GMS) Highlights | |
|---|---|
| Scheme Name | Gold Monetization Scheme (GMS) |
| Launch Year | 2015 |
| Regulator | Reserve Bank of India (RBI) |
| Nodal Ministry | Department of Economic Affairs, Ministry of Finance |
| Purpose | Convert idle gold into an interest-earning asset and reduce dependence on gold imports |
| Currently Available Deposit | Short Term Bank Deposit (STBD) |
| STBD Tenure | 1 to 3 years (as decided by participating banks) |
| Discontinued Components | Medium Term Government Deposit (5–7 years) and Long Term Government Deposit (12–15 years) for fresh deposits from 26 March 2025 |
| Minimum Gold Required | 10 grams |
| Maximum Deposit Limit | No upper limit |
| Accepted Forms of Gold | Jewellery, coins, and bars (excluding embedded stones and other non-gold materials) |
| Purity Standard | 995 fineness |
| Eligible Depositors | Resident Indians, HUFs, firms, trusts, companies, charitable institutions, and government entities |
| NRI Eligibility | Not eligible |
| Interest Payment | Paid in INR as per the rate decided by the bank |
| Principal Redemption | Gold or INR equivalent (as chosen at the time of deposit) |
| Tax Benefits | Interest exempt under Section 10(15) of the Income Tax Act; specified capital gains exemptions available |
| Loan Facility | Rupee loans may be available against the GMS Deposit Certificate, subject to bank policy |
| Where to Deposit | BIS-certified Collection and Purity Testing Centres (CPTCs) and designated bank branches |
| Application Process | Offline through a designated bank branch or CPTC |
| Official Website | rbi.org.in |
Introduction of Gold Monetization Scheme: A Brief Insight
Indian households are estimated to hold thousands of tonnes of gold in the form of jewellery, coins, and bars. In many cases, this gold remains locked in lockers and cupboards for years, generating no income while also requiring safekeeping. To help citizens make better use of their idle gold and reduce the country’s dependence on gold imports, the Government of India launched the Gold Monetization Scheme (GMS) in 2015.
The scheme is regulated by the Reserve Bank of India under the Department of Economic Affairs, Ministry of Finance, and is implemented through designated Scheduled Commercial Banks across the country.
The main objective of GMS is to bring unused gold into the formal financial system. Instead of keeping gold idle at home, individuals and eligible institutions can deposit it with authorised banks and earn interest on it for a specified period.
Under the scheme, depositors can submit a minimum of 10 grams of eligible gold in the form of jewellery, coins, or bars at a Collection and Purity Testing Centre (CPTC). After purity verification and processing, the gold is converted into a formal deposit account.
It is important to understand the current structure of the scheme. Following a Government of India decision effective from 26 March 2025, fresh deposits under the Medium Term Government Deposit (MTGD) and Long Term Government Deposit (LTGD) categories are no longer being accepted. At present, only the Short-Term Bank Deposit (STBD) option is available for new deposits.
Under STBD, participating banks determine the deposit tenure and interest rate in accordance with their internal policies and prevailing market conditions. Interest is paid in Indian Rupees, while the deposited gold can be redeemed either in gold or its equivalent value in Rupees, depending on the option selected at the time of deposit.
Another major advantage of the scheme is its tax treatment. Interest earned on eligible deposits is exempt under the applicable provisions of the Income Tax Act, and certain capital gains arising from the deposit and redemption of gold are also exempt, subject to prevailing rules.
Resident Indian individuals, Hindu Undivided Families (HUFs), firms, companies, trusts, charitable institutions, and certain government entities can participate in the scheme. However, NRIs are not eligible to open new GMS deposits.
Anyone interested in depositing gold can visit a designated bank branch or a BIS-certified CPTC for guidance and account opening formalities. For official rules, operational guidelines, and updated directions, depositors should refer to rbi.org.in.
Retirees looking for a different fixed-income option can explore the Senior Citizens Savings Scheme (SCSS), offering quarterly interest on a lump-sum deposit at a government-backed rate. Those seeking monthly cash flow can check the Post Office Monthly Income Scheme (POMIS), while parents saving for a daughter’s future can look at the Sukanya Samriddhi Yojana, a government-backed savings scheme offering attractive interest for a girl child’s education and marriage expenses.
Gold holders and anyone looking for more savings, investment, and financial security schemes available under the Central Government can explore all available programmes on our Central Government Welfare Schemes page.
Benefits Provided to Eligible Beneficiaries
The Gold Monetization Scheme (GMS) allows individuals and institutions to deposit idle gold with participating banks and earn returns on it. However, the benefits currently available depend on the deposit category that remains operational under the scheme.
Currently Available for New Deposits
As per the Government of India’s decision dated 26 March 2025, fresh deposits are now accepted only under the Short Term Bank Deposit (STBD) category. The Medium Term and Long Term Government Deposit options are no longer open for new investments.
Short Term Bank Deposit (STBD)
- Deposit tenure ranges from 1 year to 3 years
- The exact tenure is determined by the participating bank
- Interest rates are decided by individual banks based on prevailing market conditions
- Interest is paid in Indian Rupees (INR)
- Premature withdrawal may be allowed as per the bank’s policy
Reference: Earlier Government Deposit Categories
While fresh investments are no longer permitted in these categories, existing deposits opened before 26 March 2025 continue until maturity under their original terms.
| Deposit Type | Tenure | Lock-in Period | Interest Rate |
|---|---|---|---|
| Medium Term Government Deposit (MTGD) | 5 to 7 Years | 3 Years | 2.25% per annum |
| Long Term Government Deposit (LTGD) | 12 to 15 Years | 5 Years | 2.50% per annum |
Note: Existing MTGD and LTGD accounts remain valid until maturity, but renewal and fresh deposits under these categories are not permitted.
Gold Deposit Features
- Minimum deposit requirement: 10 grams of gold
- No upper limit on the quantity of gold that can be deposited
- Gold can be deposited in the form of jewellery (after removal of stones), coins, bars, or bullion
- Gold is assessed and valued based on standard purity norms
Maturity and Redemption Options
- The deposited gold can be redeemed at maturity in the form of gold or its cash equivalent, subject to the option selected at the time of deposit
- Interest is credited only in INR
- Any fractional gold quantity that cannot be returned physically is generally settled in cash
Additional Advantages
- Depositors can avail of loans against the GMS Deposit Certificate, subject to the lending policies of the bank
- Interest earned under the scheme enjoys specified tax exemptions under applicable provisions of the Income Tax Act
- Capital gains arising from the deposit and redemption of gold under the scheme are also exempt, as per prevailing government rules
- Deposited gold remains safely stored through the authorised banking and refining system, reducing the risks associated with keeping gold at home
Eligibility Conditions Required to be Fulfilled
The Gold Monetization Scheme (GMS), regulated by the Reserve Bank of India (RBI) and implemented through designated banks, allows a wide range of resident entities to deposit idle gold and earn returns on it. The following categories are eligible to participate in the scheme.
Eligible Depositors
- Resident Indian Individuals (single or joint account holders)
- Hindu Undivided Families (HUFs)
- Proprietorship Firms
- Partnership Firms
- Companies and Corporate Entities
- Charitable and Religious Institutions
- Trusts
- Mutual Funds and Exchange Traded Funds (ETFs) registered with SEBI
- Central Government, State Governments, and Government-owned entities
Joint Deposit Facility
- Two or more eligible persons can open a joint Gold Monetization Scheme account
- Nomination, operation, and redemption rules are generally governed by the participating bank’s standard deposit guidelines
Minimum Gold Requirement
- A minimum of 10 grams of raw gold is required for deposit
- Gold can be deposited in the form of jewellery (excluding stones and other attachments), coins, bars, or bullion
Who Is Not Eligible
- Non-Resident Indians (NRIs)
- Foreign individuals and foreign institutions
- Entities not permitted under RBI guidelines
Note: The Government of India discontinued fresh mobilization under the Medium Term Government Deposit (MTGD) and Long Term Government Deposit (LTGD) categories with effect from March 2025. At present, new deposits are generally accepted only under the Short Term Bank Deposit (STBD) component, subject to the eligibility conditions prescribed by RBI and participating banks.
Documents Required to be Attached
To open a Gold Monetization Scheme (GMS) deposit account, depositors should keep the following documents ready for verification at the designated bank branch or Collection and Purity Testing Centre (CPTC):
- Aadhaar Card, PAN Card, Voter ID, or other valid KYC document
- Address Proof
- Recent Passport-Size Photograph
- Gold Monetization Scheme Deposit Form, including your preferred redemption option (cash/INR or physical gold, wherever applicable)
- Bank Account Details for interest payments and maturity proceeds
How Beneficiaries Can Apply to Avail the Benefit of the Scheme
Depositing gold under the Gold Monetization Scheme is quite simple once you understand the process. Think of it like putting money in a bank fixed deposit; the difference is that here you deposit your gold, and in return it starts earning interest. Here’s how the process works from start to finish.
Step 1: First, complete your KYC formalities with a participating bank. If you already have a fully KYC-compliant account with that bank, you may not need to submit the documents again.
Step 2: Visit a nearby Collection and Purity Testing Centre (CPTC) or a designated bank branch offering the Gold Monetization Scheme. These centres are authorised to test and accept gold deposits.
Step 3: Carry the gold you wish to deposit. It can be in the form of jewellery, coins, bars, or bullion. The minimum deposit requirement is 10 grams of gold.
Step 4: The testing centre first checks the purity of your gold using an XRF (X-Ray Fluorescence) test. This test is quick and does not damage your jewellery.
Step 5: After seeing the purity result, you can decide whether you want to continue. If you are not satisfied, you can simply take your gold back and leave. Your jewellery will remain exactly as it was.
Step 6: If you decide to proceed, the centre will ask for your consent to conduct a fire assay test. This is the final purity test and requires the gold to be melted for accurate assessment.
Step 7: Once the fire assay process begins, the jewellery cannot be returned in its original form. Therefore, make your decision carefully before giving consent.
Step 8: After testing is completed, the CPTC issues a deposit certificate showing the exact quantity and purity of your gold, converted into standard 995 purity gold.
Step 9: The testing centre shares the deposit details with your bank, and your Gold Deposit Account is opened or credited accordingly.
Step 10: Your deposit starts earning interest as per the applicable Gold Monetization Scheme rules. Currently, fresh deposits are accepted only under the Short Term Bank Deposit (STBD) category.
Step 11: When the deposit period ends, you receive your maturity amount according to the option selected at the time of deposit. The principal can be redeemed in gold or its cash equivalent (where permitted), while interest is paid in Indian Rupees.
Important Links Available of the Scheme
- Gold Monetization Scheme, RBI Official FAQs (Updated 25 March 2025)
- Gold Monetization Scheme, RBI Master Direction
- MTGD/LTGD Discontinuation Official PIB Press Release
- Bureau of Indian Standards, List of CPTCs (Collection and Purity Testing Centres)
Designated Banks Offering GMS
- State Bank of India (SBI)
- Punjab National Bank (PNB)
- Bank of Baroda
- Indian Overseas Bank (IOB)
- ICICI Bank
- HDFC Bank
Contact Details in Case of Help Needed
- Regulator: Reserve Bank of India (RBI)
- Nodal Ministry: Department of Economic Affairs, Ministry of Finance, Government of India
- Local Level: Contact any designated bank branch offering GMS, or visit a BIS-certified Collection and Purity Testing Centre (CPTC) near you
Frequently Asked Questions (FAQs)
Q. What is the Gold Monetization Scheme (GMS)?
Ans. The Gold Monetization Scheme is a Government of India initiative that allows individuals and eligible institutions to deposit their idle gold with designated banks and earn interest on it. Instead of keeping gold locked away at home, depositors can put it to productive use while retaining ownership of its value.
Q. Is the Gold Monetization Scheme still open for new deposits?
Ans. Yes. New deposits are currently accepted under the Short Term Bank Deposit (STBD) category. However, fresh deposits under the Medium Term Government Deposit (MTGD) and Long Term Government Deposit (LTGD) categories were discontinued from 26 March 2025.
Q. What happens if I already have an MTGD or LTGD account?
Ans. Existing deposits opened before 26 March 2025 continue under their original terms until maturity. However, these deposits cannot be renewed once they mature.
Q. What is the minimum quantity of gold required?
Ans. You can deposit a minimum of 10 grams of gold. The gold may be in the form of jewellery, coins, bars, or bullion. There is no upper limit on the quantity that can be deposited.
Q. Who can open a Gold Monetization Scheme account?
Ans. Resident Indian individuals, HUFs, firms, companies, trusts, charitable institutions, and certain government entities can participate in the scheme. NRIs are currently not eligible to open new GMS accounts.
Q. Can I open a joint GMS account?
Ans. Yes. Two or more eligible persons can jointly open a Gold Monetization Scheme deposit account, subject to the participating bank’s rules.
Q. Will I get my jewellery back in the same design?
Ans. No. Once you agree to the fire assay process and your gold is melted for purity assessment, the original jewellery design cannot be returned. Before that stage, you are free to withdraw your gold if you choose not to proceed.
Q. Is GMS the same as taking a gold loan?
Ans. No. Under GMS, you deposit your own gold to earn interest. In a gold loan, you pledge gold as security to borrow money. Both serve entirely different purposes.
Q. How is interest paid under the scheme?
Ans. Interest is paid in Indian Rupees (INR). The applicable interest rate for Short Term Bank Deposits is decided by the participating bank.
Q. Can I get my maturity amount in gold?
Ans. Depending on the deposit category and the option selected at the time of opening the account, the principal may be redeemed in gold or its cash equivalent, subject to the scheme guidelines.
Q. Are there any tax benefits under GMS?
Ans. Yes. Interest earned under the scheme enjoys tax benefits as per applicable provisions of the Income Tax Act. Certain capital gains arising from the deposit and redemption of gold under the scheme are also exempt, subject to prevailing rules.
Q. Can I take a loan against my GMS deposit?
Ans. Yes. Many participating banks allow depositors to avail of rupee loans against their Gold Monetization Scheme Deposit Certificate, subject to their internal lending policies.
Q. Where can I deposit my gold?
Ans. Gold can be deposited through authorised Collection and Purity Testing Centres (CPTCs) and designated branches of participating banks offering the Gold Monetization Scheme.
Q. Is my deposited gold safe?
Ans. Yes. After testing and acceptance, the gold is handled through authorised refining and banking channels, reducing the risks associated with storing valuable gold at home.
Q. Where can I get help regarding the scheme?
Ans. You can contact a designated participating bank branch or visit the official Reserve Bank of India website at rbi.org.in for the latest guidelines, notifications, and operational details.
Tabassum is a government schemes researcher and writer with 5 years of experience tracking Central and State welfare scheme programmes across India. She has covered 500+ schemes spanning agriculture, women welfare, education, and housing, helping lakhs of beneficiaries understand their entitlements in simple language.