State Bank of India Announces Launch of Revamped Gold Deposit Scheme

SEATTLE (Scrap Monster): The State Bank of India (SBI) - the country’s largest public sector bank has announced the launch of a revamped fixed deposit scheme in gold. The newly launched Revamped Gold Deposit Scheme (R-GDS) aims to mobilize tonnes of gold lying idle in Indian households and put them into productive use. The gold demonetization scheme offers safety for customers’ gold, while providing them opportunity to earn interest income on their idle gold holdings.

According to bank authorities, any resident Indian belonging to various categories such as individuals, proprietorship and partnership firms, Hindu undivided family, SEBI registered trusts including mutual funds or ETFs and companies are eligible to make a deposit. A person needs to deposit a minimum of 30 grams of gold. However, no upper limit has been fixed for the deposit quantity.

There are three types of deposits. The Short Term Bank Deposit (STBD) is for tenure of one to three years. The interest rate for this deposit type is fixed at 0.50% per annum for 1 year, 0.55% for up to 2 years and 0.60% for 3 years. The tenure of the second scheme, named Medium Term Government Deposit (MTGD) is between 5 and 7 years, the interest rates of which is fixed at 2.25 per cent p.a. Also, the Long Term Government Deposit (LTGD) will be for a period of 12-15 years and will carry interest rate of 2.50% per annum.  

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Both MTGD and LTGD will be accepted by the bank on behalf of the Central Government. The principal will be denominated in gold, whereas the interest shall be paid in rupees every year on 31^st march or cumulatively upon maturity. The depositor can choose, at the time of deposit, either one of these options to receive interest. Gold will be accepted in the form of raw gold- gold bars, coins, jewellery excluding stones and other metals. The customers will be provided with Gold Deposit Certificate for pure gold contents.

The bank noted that the R-GDS will be initially launched only in selected branches, with plans to extend into more number of branches in future.