OLD is GOLD - Revamped Gold Deposit Scheme by Government of India

The government of India introduced a new scheme for Gold owners which provides an opportunity to earn interest which is otherwise not possible to get it from any institution. Let your idle gold work for you and give some passive return. Learn it to earn it more.

2/19/20252 min read

We Indians love gold very much. When equity markets decline, we become fearful, and some weaker hands sell their equity in panic. However, if gold prices drop, we become greedy and buy more. This mindset ensures that we do not panic and continue buying regardless of gold's price fluctuations. The same approach was followed by our ancestors, as almost all Indian families have accumulated gold in the form of jewelry, gold bars, etc., over generations. Most families inherit such gold and store it either in their household vaults or in bank lockers, paying an annual locker rent of ₹4,000 to ₹6,000.

In short, your gold sits idle in a vault and does not generate any returns. However, the government has introduced a scheme to help you earn returns on such idle gold. The following are the scheme details. Those who keep their gold merely for family tradition and do not use it should consider investing in this scheme, which will save locker rent and provide gold appreciation along with interest for a specific tenure.

As of February 2025, the Government of India offers the Revamped Gold Deposit Scheme (R-GDS), which provides an interest rate of up to 2.5% per annum. This scheme allows investors to deposit their idle gold and earn interest, while also benefiting from potential appreciation in gold value.

Key Features of the Revamped Gold Deposit Scheme (R-GDS):

Interest Rates and Tenure:

Short Term Bank Deposit (STBD): Tenure of 1 to 3 years with interest rates ranging from 0.50% to 0.60% per annum.

Medium-Term Government Deposit (MTGD): Tenure of 5 to 7 years with an interest rate of 2.25% per annum.

Long-Term Government Deposit (LTGD): Tenure of 12 to 15 years with an interest rate of 2.50% per annum.

Minimum Deposit: 10 grams of raw gold (bars, coins, or jewelry excluding stones and other metals).

Redemption Options:

STBD: Option to receive the principal in gold or equivalent rupees upon maturity.

MTGD & LTGD: Redemption in gold or INR equivalent, with a 0.5% administrative charge for gold redemption.

For more details, you can refer to the State Bank of India's official page on the Revamped Gold Deposit Scheme.

Please note that the Sovereign Gold Bond (SGB) scheme, which previously offered a 2.5% annual interest rate, was discontinued in 2024 due to high borrowing costs for the government. Existing bonds remain unaffected.