Key Highlights
- The Gold Monetisation Scheme lets you earn rupee interest on gold you already own.
- It was launched in 2015 and runs through banks and certified testing centres.
- The minimum deposit is 10 grams of raw gold, with no maximum.
- Resident Indians, families, trusts, companies and charities can deposit.
- Your gold is tested, melted into 995 fineness bars, and recorded on a deposit certificate.
- Fresh deposits now go into Short Term Bank Deposits of 1 to 3 years.
- The older 5 to 15 year government deposits stopped taking new gold from 26 March 2025.
- Interest on short-term deposits is set by each bank.
- Rupee loans against deposit certificates are allowed, subject to bank terms.
- Tax treatment depends on current rules, so confirm before you plan around any exemption.
- Gold price moves, rule changes and differences between banks are the main risks.
Many Indian families hold gold that rarely leaves the locker or the cupboard. It is valuable, but it earns nothing while it sits there. The Gold Monetisation Scheme was designed to change that.
It lets you deposit gold with a bank and earn interest in rupees, and the Government of India has run it since 2015. The minimum deposit is 10 grams of raw gold, with no upper limit, so the scheme suits small and large holders alike.
In this guide, we walk through how the scheme works in 2026, who can use it, how deposits are tested and held, what returns look like, and what to check before you hand over any gold.
Quick Snapshot
| Point | What You Need to Know |
| Launched | 2015, under a Government of India office memorandum |
| Who can deposit | Resident Indians, HUFs, trusts, companies, charities and government entities |
| Minimum deposit | 10 grams of raw gold (bars, coins or jewellery, excluding stones and other metals) |
| Maximum deposit | No limit |
| Purity after testing | 995 fineness |
| Fresh deposits | Short Term Bank Deposit, 1 to 3 years, rate set by the bank |
| Older MTGD and LTGD | No new deposits or renewals from 26 March 2025 |
| Interest currency | Rupees (₹) |
| Tax | Depends on current rules; check before relying on any exemption |
What Is the Gold Monetisation Scheme?
The Gold Monetisation Scheme, which you may also see spelled Gold Monetization Scheme, is a government framework announced through an office memorandum dated 15 September 2015. Its purpose is to put gold that households and institutions hold but do not use into productive use. Over the long run, the government hopes this will also reduce the country's dependence on gold imports.
Idle gold has a cost. Gold in a locker carries rent, and gold kept at home carries the risk of theft or loss while earning no return. The scheme offers a way to turn that metal into an interest-earning deposit. If you are weighing home storage against lockers and private vaults, our guide to where to keep your gold lays out the trade-offs.
How the Scheme Came Together
The scheme brings two earlier arrangements, the Gold Deposit Scheme and the Gold Metal Loan scheme, into one framework. The revamped version has two sides. On the deposit side, customers place gold with banks. On the loan side, banks lend gold to jewellers.
The Two Sides of the Framework
On the deposit side, your gold is tested at a certified centre and converted into standard bars. The bank then issues a deposit certificate in the equivalent of 995 fineness gold. On the loan side, gold collected under short-term deposits can be provided to jewellers through a Gold Metal Loan account, which is maintained in grams. Jewellers take physical delivery from refiners, and the loan tenor is currently 180 days.
As a depositor, you do not manage the loan side. It does explain why banks and the government are interested in the gold you bring in.
Who Can Deposit Gold Under the Scheme
Eligibility is broader than many people expect. Resident Indians can deposit, which covers individuals, Hindu Undivided Families (HUFs), proprietorship and partnership firms, trusts (including SEBI-registered mutual funds and exchange traded funds), companies, charitable institutions, and central or state government entities.
Two or more eligible depositors can also open a joint deposit. The certificate is issued in their joint names, and the usual rules on joint operation and nomination for bank accounts apply.
You need to complete KYC before depositing, unless the bank already has you as a KYC-compliant customer. If you do not bank with the institution yet, you may need to open a savings or current account first. Requirements vary by bank, so ask before you visit.
How the Deposit Process Works
From Your Gold to a Deposit Certificate
Start by filling in the scheme application at a designated bank branch. Next, take your gold to a Collection and Purity Testing Centre (CPTC) or a GMS mobilisation agent. These centres must be certified by the Bureau of Indian Standards. Some banks ask you to visit the centre within a set number of days after filling the form, so check that timeline with your branch.
At the centre, your gold is tested in front of you. If you agree to proceed, the gold is melted and converted into 995 fineness bars. The weight in 995 fineness becomes the quantity credited to your account. You receive a receipt showing the quantity and purity, and the bank then issues your certificate.
Before you give consent for melting, decide whether you want your jewellery back. Once fire assaying begins, you can only get the gold back in melted form. Ask the centre for an X-ray fluorescence (XRF) test first. It gives a reading without melting, and you can decide after seeing it.
How Much You Can Deposit
The minimum deposit is 10 grams of raw gold at any one time. Bars, coins and jewellery all count, but stones and other metals are excluded from the weight. There is no maximum. The quantity is recorded to three decimal places of a gram.
When Interest Starts
Timelines matter here. The bank credits your short-term deposit account either on the same day you receive the deposit receipt or within 30 days of depositing the gold, whichever is earlier. Interest begins from the date your gold is converted into tradable bars, or 30 days after the centre receives it, whichever is earlier.
Deposit Options Under the Scheme
The scheme currently accepts fresh deposits only as Short Term Bank Deposits. Older government deposits still exist, but new gold for them is no longer accepted.
| Feature | Short Term Bank Deposit (STBD) | Medium Term Government Deposit (MTGD) | Long Term Government Deposit (LTGD) |
| Tenure | 1 to 3 years | 5 to 7 years | 12 to 15 years |
| Minimum lock-in | Set by the bank | 3 years | 5 years |
| Interest rate | Set by the bank | 2.25% per year | 2.50% per year |
| New deposits | Open | Stopped from 26 March 2025 | Stopped from 26 March 2025 |
Short Term Bank Deposit (STBD)
Under STBD, banks accept gold on their own account for a tenure of 1 to 3 years. Each bank decides the interest rate, based on prevailing international lease rates, its own costs and market conditions. Interest is paid in rupees. At maturity, you can take back the principal in gold or in rupees equal to the value of your gold at that time. Early redemption is at the bank's discretion.
The Older Government Deposits
The medium and long-term deposits were accepted on behalf of the Government of India. From 26 March 2025, the government stopped accepting new deposits under these components, including renewals of existing ones. Gold deposited on or before 25 March 2025 continues under the existing rules until maturity.
This matters because you may still see 2.25% or 2.50% offers online. Those rates belong to deposits that can no longer be opened, so always check the date on any scheme information you read.
How Your Gold Is Held and Secured
Once your gold is tested and melted, it becomes standard 995 fineness bars held under the scheme's arrangements. What you hold is a deposit certificate that records your quantity and purity, not the bars themselves. Banks are also allowed to lend gold to other designated banks under the scheme, and to hedge their gold exposure.
Before you deposit, check a few things:
- The list of designated branches and certified centres, so you know where you are going.
- The type of deposit and the certificate you will receive.
- How the certificate is delivered. Some banks send it by courier and to your registered email.
- How to confirm that a centre is certified, rather than trusting a sales representative's word.
- What the redemption process looks like, including how your gold is valued and paid back.
Digital gold works differently. You buy it through an app, and the gold is held on your behalf by the provider. To see how that setup works, read How Digital Gold Works: The Complete Behind-the-Scenes Guide.
If you want to start small, you can begin buying 24K digital gold on the Jar app. You can start with a small amount and check your holdings in the app anytime. Start with digital gold on Jar
Digital gold prices move with the market, and returns are not guaranteed. This article is for information only and is not financial advice. Read the terms and check the storage and custody details before you invest.
Interest, Redemption and Loans
How Interest Is Paid
Interest on short-term deposits is paid in rupees, and the payment schedule is set by the bank. For the older government deposits, interest was paid as simple interest every year, or as cumulative interest at maturity compounded annually. In all cases, the rupee interest is calculated with reference to the value of gold at the time you deposited it.
What You Get Back at Maturity
At maturity, you choose whether to take back the principal in gold or as a rupee amount equal to the value of your gold at redemption. You make this choice when you open the deposit. Any fraction too small to make a standard bar or coin is paid in cash. For example, if your principal is 302.86 grams, the bank can return 302 grams of gold and pay the 0.86 gram balance in rupees.
Borrowing Against Your Certificate
You can take a rupee loan against the deposit certificates issued under the scheme. The loan amount, interest rate and terms are set by your bank, so compare options before you apply.
Tax Points to Keep in Mind
Tax treatment is the area where you should be most careful. Official material from the government says tax implications will be notified from time to time. Earlier notifications referred to exemptions on interest and capital gains for the previous gold deposit scheme, and said similar treatment would apply to the revamped scheme where applicable.
Because that position depends on current rules and notifications, we have not stated a firm tax exemption here. Before you plan around the tax outcome, check with a qualified tax professional, and read your bank's latest guidance.
Risks You Should Weigh Before Depositing
Gold Price Movement
Your principal is measured in grams, but the rupee value you get back at redemption depends on the gold price at that time. Interest is paid in rupees, so it does not change the basic exposure to gold prices. If you want a clearer picture of what moves prices, our article on why gold price trends change explains the main drivers.
Rules Can Change
The scheme has been amended several times. Changes were made in 2021 to make it simpler and to allow more banks and jewellers to take part. In March 2025, the government stopped new medium and long-term deposits. Rules can change again, so check the current terms at the time you deposit, not when you first read about the scheme.
Bank Choice Matters
Not every bank offers every deposit type, and rates and branch networks differ. Some banks may not offer short-term deposits at all. Before visiting, call or check the bank's current list of designated branches and ask which deposit types it accepts.
Watch Out for Lookalike Offers
Because many people search for gold schemes online, lookalike apps and misleading offers are common. Be cautious of anyone who promises fixed or unusually high returns, or who pushes you to act quickly. Our guide on how to spot fake digital gold apps covers the warning signs. For this scheme, confirm everything at a designated bank branch.
How the Scheme Compares With Other Ways to Hold Gold
| Feature | Gold Monetisation Scheme | Gold Kept at Home | Digital Gold |
| Earns interest | Yes, in rupees on short-term deposits | No | Usually no interest on the gold itself |
| Entry amount | 10 grams of raw gold minimum | Any gold you already own | Depends on the provider's terms |
| Holding period | Fixed tenure of 1 to 3 years for STBD | No set period | Depends on the provider's terms |
| Main risks | Gold price, rule changes, bank terms | Theft, loss, no return | Provider terms, price movement, custody |
If you are looking at investing in gold on a regular basis, a Gold SIP through a mutual fund works differently again. Our comparison of Gold SIP vs Mutual Fund explains the differences in detail.
The Gold Monetisation Scheme gives Indian households a way to put idle gold to work, with interest paid in rupees and a 10-gram starting point.
Short-term deposits are the option open today, and the older long-term deposits are closed to new gold. Before you deposit, compare banks, confirm which deposit type they offer, read the terms, and check how your gold will be tested and recorded.
If you are still deciding how to hold gold, comparing your options side by side is a sensible next step.
Frequently Asked Questions
Is the Gold Monetisation Scheme still open for new deposits?
Yes, but only for short-term deposits of 1 to 3 years. The medium and long-term government deposits were discontinued from 26 March 2025, including renewals. Because each bank decides which deposit types it offers, check with your branch before you visit.
What is the minimum amount I can deposit?
The minimum is 10 grams of raw gold at any one time, and there is no maximum. Bars, coins and jewellery all count, but stones and other metals are excluded from the weight.
Can I take a loan against my deposit?
Yes. Rupee loans are allowed against the deposit certificates issued under the scheme. The loan amount, interest rate and terms depend on your bank.
Is the interest from this scheme taxable?
The answer depends on current tax rules and notifications, which can change. Earlier government notes referred to exemptions for the previous gold deposit scheme and said similar treatment would apply where applicable. Check the latest position with a qualified tax professional before you plan around it.
Can I withdraw my gold early?
For short-term deposits, early redemption is at the bank's discretion and can be settled in rupees or gold. For the older government deposits, early redemption was only allowed in rupees and only in specific situations, such as the depositor's death.
Do I need KYC to deposit gold?
Yes, unless the bank already has you as a KYC-compliant customer. Ask the branch what documents they need, since the process can vary.
