How to Earn Interest on Your Gold: Insights from Meenal Goel

Are you looking for ways to turn your unused gold into an income-generating asset? Meenal Goel, a finance influencer, highlights the Gold Monetization Scheme, a strategic initiative by the government to help you earn interest on gold that might otherwise be sitting idle in bank lockers. This scheme aims to make gold a productive asset, offering two types of deposits with varying terms and benefits. Here's how you can get started.

The Basics of the Gold Monetization Scheme

Launched to convert gold into a valuable financial asset, the Gold Monetization Scheme (GMS) offers an opportunity for individuals and institutions to earn interest by depositing their gold. This scheme not only benefits depositors but also reduces India's reliance on gold imports, ultimately supporting the national economy. Here are the two primary deposit types under GMS:

1. Short-Term Bank Deposit (STBD): Flexible and Convenient

The Short-Term Bank Deposit (STBD) is structured for individuals who may need flexible deposit options with a shorter tenure. Here's how it works:

• Tenure Options: The STBD allows depositors to choose tenures ranging from one to three years, including broken tenures like one year and three months or two years and four months, adding flexibility to the investment.
• Interest Rates and Penalties: The interest rates are set by the banks, which gives depositors options to choose a bank that aligns with their expectations. However, it's important to be aware that penalties may apply for early withdrawal based on the bank's specific terms.
• Ideal for Short-Term Goals: This option is perfect for those looking to earn a return on gold for a short period, with the ability to withdraw based on personal financial needs.

2. Medium- and Long-Term Government Deposit (MLTGD): Long-Term Security

For those looking for long-term investments, the Medium- and Long-Term Government Deposit (MLTGD) offers added benefits and government-backed security. Here's a breakdown:

• Tenure Choices: MLTGD provides two options—medium-term deposits with five-to-seven-year maturities and long-term deposits with 12 to 15 years.
• Fixed Interest Rates: These deposits earn a fixed annual interest of 2.25% for medium-term and 2.5% for long-term deposits. Interest is paid on March 31 every year, ensuring a reliable income from your gold.
• Lock-In Periods: The medium-term deposits have a three-year lock-in period, while long-term deposits have a five-year lock-in. These periods provide security and encourage sustained investment.

Advantages of the Gold Monetization Scheme

Investing in the Gold Monetization Scheme offers both personal and national economic benefits:

• Earn Interest on Idle Gold: Unlike traditional storage, GMS allows your gold to generate interest, enhancing the value of your asset over time.
• Lower Import Dependency: By circulating existing gold, the scheme helps reduce the need for gold imports, supporting the nation's economy.
• Investment Flexibility: Deposits in GMS offer flexibility, as you can choose terms that suit your financial goals, starting with as little as 10 grams of gold.

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Meenal Goel's insights into the Gold Monetization Scheme make it clear that this government initiative is an excellent way to make your idle gold work for you. Whether you opt for the short-term bank deposits or the government-backed medium and long-term options, GMS provides a secure and productive alternative to simply storing gold in lockers. Starting with just 10 grams, you can turn your gold into a financial asset and contribute to national economic growth.