SBI Gold Deposit Scheme: Get Regular Income From Your Gold

SBI Gold deposit Scheme is there to give you recurring income while original gold will remain intact. Of course from this income you can buy more gold as well. In either words when you put your gold in this scheme it starts to grow. The SBI gold deposit scheme is superseded by the Gold Monetization scheme. This scheme is more flexible and gives better interest.

SBI Gold Deposit scheme accepts all types of gold whether it is jewelry or bullion. The scheme will give interest on the pure gold irrespective of the form

Should I Deposit The Jewelry?

You can deposit the gold jewelry in Gold deposit scheme, But you should beaware that the gold deposited to this scheme is subjected to the melting. Hence, it is not advisable to deposit those jewelry which are used. Instead, you should deposit the idle gold. You can deposit those jewelry which are old fashioned and kept as an asset.

Must Read: Gold Bond Gives more Profit than physical gold

Why Should I Deposit in SBI Gold Deposit Scheme?

Depositing your idle jewelry in SBI Gold Deposit Scheme will give you many benefits.

  • Peace of mind. You need not to be concerned about its safety. Not threat of burglary or stealing.
  • You will get the interest for nothing.
  • Your gold will get tested and you will get pure gold after that. No melting assaying charge.
  • You will save the locker charge.
  • You will serve the nation by reducing the import bill.

Tax Benefits of SBI Gold Deposit Scheme

  • No income tax on the interest from this scheme
  • No capital gain tax if you take back cash instead of the gold after the maturity.
  • You will not be charged wealth tax for the deposited gold.

Will Your Gold Stay Safe?

Your gold deposit will be as safe as your money in the bank. Actually banks do not put all the gold in its safe instead major chunk of the gold is given to jewelers as loan or it remains in RBI mint. Bank gets interest over it and pays the majority of this to the depositor.

What interest rate will I earn?

Interest rate is not very lucrative in SBI Gold Deposit Scheme. It is from 0.75% to 1%. Don’t frown; you get nothing when you keep your gold in home. As well this interest is in gold currency. This simply means that if you deposit 1 Kg Gold the bank will give price of 10 gram gold (1% of 1 Kg) after one year. Assume gold price doubles in one year then effectively you are getting 2% interest rate.

Also don’t forget to add your expense of locker.

Why Interest Rate is so low?

Gold do not produce anything itself such as farm land.

People don’t take gold jewelry on rent such as property.

You will get your whole gold with all the appreciated value.

What are the restrictions?

 Now government has eased the restrictions from SBI Gold Deposit Scheme. The most important is the reduction of minimum tenure. Now you can deposit your gold for 6 months as well. Earlier the minimum tenure was 3 years.

You have to deposit more than 500 gram of the gold for this scheme. This is a major deterrent. Hopefully government will give some relaxation in weight also. The Gold Monetization Scheme has the minimum limit of 30 gram only.

What will I do if I need fund for exigency?

You can take loan from any branch of the SBI by mortgaging your gold deposit certificate. It same as you take loan by depositing your FD certificate. Loan can be taken up to the 75% of the gold value. Interest rate will be lower than the personal loan.

Where should I Deposit My Gold ?

Not all banks provide Gold Deposit Scheme. Till now only SBI this scheme and at the designated branches only. But now RBI has given permission to the banks to start Gold Deposit scheme on its own. Banks do not need prior permission. So in future You can expect that more banks will start this scheme.

What is the procedure of SBI Gold Deposit Scheme?

Go to your nearest branch with your ornaments or gold bar biscuits etc. Bank will take the gold and give you the provisional certificate. Bank will send the gold to the reserve bank gold mint. Purity of the gold will be determined there and it is melted. According to the purity the weight of the gold will be fixed. After that Bank will give you the Final certificate. You can demand standard certificates of 500 gm, 1000 gm or 2000 gm also. Either you can opt for statement or passbook also. Note often it may happen that actual weight of the gold becomes less because of impurity. Don’t fret, you must rely on RBI.

How Will I Get Back My Gold?

After Completion of the tenure you can claim your gold with the interest. For the Interest you have the option of cumulative and non cumulative.

Either you can take the cash instead of the gold. No capital gain tax will be charged in this amount.

How can I check that Gold returned is pure?

Gold returned will 0.999 finesse pure, certified by RBI Mint.  It is the purest form of the gold. It will be in bar form.

How Gold Deposit Scheme Works

Banks give your gold to the jewelers on loan. Bank earns interest on it. Major part of the interest is given to the customer.SBI gold deposit scheme flowchart


I am the person behind this Blog. I started this blog just to share useful information. After getting overwhelming response this pastime became my passion. Job with CNBC Awaaz also helped me to explore the world of Investment, Saving, Insurance, and Tax. Now I am a full-time personal finance blogger.

  • Prabhakar Krishna

    As the Deposit limit is 500 gm; Can we deposit gold in joint Individual or joint Individual & HUF names ?

  • Divya Chandran

    Hi Chandrakant,500 gms of minimum gold, is this should be the weight of ornament or for the melted gold?Is there any chance that SBI will reduce the minimum quantity from 500gm?

    • Hi Divya

      Please Wait for some weeks. Government is coming with new gold monetisation scheme. It has relaxed norms.


  • John

    Now I heard that the minimum amount to be deposited is 30 fm

  • jubila fernando

    What is the minimum amt of gold deposit?

    • Hi Jubila

      You have to deposit gold of more than 500 grams.


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    • shikha gupta

      dear i think u don’t read the above para clearly it should be 500g (1kg)

    • Kathirvel

      30 grams of gold minimum

  • anon

    Gold is not investment, it is pure money though these days gold is promoted as investment. 0.75 or 1% is a too low interest rate. The risk of default by bank is very high. Bank won’t keep the gold in a vault or locker, but will give that to someone else on lease or sell it. The idea is there will always be more gold deposits or buy back by bank than clients asking for their gold. This is exactly like cash deposits in bank. Since bank failures and bankruns are a reality, I don’t see why same can’t be same about gold deposits. And unlike deposit insurance upto 1 lakh, I don’t think there is any insurance on gold. If they can’t find gold one day, they will cash settle you. If you keep gold for a disaster situation like our culture promotes, keeping it in such a scheme or buying a gold ETF cancels it. Risk is simply not worth it for 1% interest or any interest.

    • Hi Anon

      You are right that for mere 0.75-1.0%, why should one put its beloved gold with a bank. But did you consider about your other assets? Do you keep all of your assets with yourself? Can you keep your shares, Mutual funds, Deposit, insurance or booked property with you. Indeed, you have to face this default risk, if you want to grow your money.
      Jewelry put in the bank locker don’t have any guarantee. If it is burgled, you can’t claim it. However people put their gold in locker.
      Financial System works like that. We have to rely on institutions.
      Suppose SBI defaults. All the savings of its customers get wiped out. Do you think credit guarantee corporation would be in the position of honoring every claim? Will it also not default after such a huge claims? Insurance companies can also default and even defaulted in the past. In your house also gold can be stolen, burgled or snatched. Think, you jeweler may have stolen some amount of your gold. That is it. Now your turn.


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      • Anon

        Hi Chandrakant,

        The difference is that other assets, including gold in bank locker and shares in NSDL are yours and are not loaned or sold to others with a prmoise that bank will reacquire when you need it back. Compared this to cash deposited in bank or gold scheme in SBI. That cash and gold, once you deposit no longer belongs to you but becomes a bank property and bank can do whatever it wants with it including selling it to others and you have no control. It essentially is a loan to bank. This loan is backed by nothing. When bank gives you a home loan, it is backed by your physical house. When you deposit cash/gold in bank, it is backed by nothing but a promise to pay back. That’s a major risk. No amount of interest will justify putting gold in this scheme. Gold is held precisely for times when govts fail and banks stop. Putting gold in a bank scheme is as good as holding no gold.


        • D K Gupta

          I agree with Anon here. Chandrakant – what do you say ?

          • I do understand the Anon’s concerns. If SBI or government of India goes bankrupt, you will not only loose your gold but also the only assets of such times. However, I don’t think such situation in near future. Also, who says put your gold with the SBI for generations.


            • D K Gupta

              Thanks Chandrakant for the reply. You are only hopeful with the timing. As I understand from my forefathers that gold is kept for emergency situations and no one can time emergency situation. I have few english/spanish/dutch friends who subscribe to this view and they also prefer to keep physical gold.
              In case of govt failures or govt systems failures (remember a normal person cannot fight with govt systems failures) only the physical assets in hand can rescue.

              • Hello Gupta Ji

                This is another aspect of gold. I agree with you that for emergency situation gold is most reliable liquid asset. But I think farm land is most valuable in any crisis situation. However, I don’t think that Indian government is going to default in next 20-30 years. In the fear of doomsday why should we forego the interest.


  • nikesh

    Where and which team in SBI does the valuation of the Jewellery – i think except for Coins and Bars, the value will always not match with the expectation – especially if it is old jewellery where the market can give better valuation. Essentially this scheme means (1) you dont want to leave Gold and want to be diversified as a de-risk (2) have a standardised gold holding so that all people value it the same way – then it makes sense. Else if you really need returns without the diversification, then sell for cash and invest in Bank term deposits.

  • Anonymus

    The minimum tenure still remains 3 years, the 6 months is a RBI directive yet to be implemented. As I understand not likely in the near future.

    • Chandrakant Mishra

      Thanks for information

  • Tushar Dhingra

    Sorry to say but you all are slightly mistaken…The interest we get on gold is 1% per annum on the value of gold deposited as on 31st March of the relevant year…that means appreciation in the prices of gold would also fetch you a higher rate of interest…and that too tax free…moreover, no capital gain tax on sale of gold deposit bonds…This is a very attractive scheme by SBI on recommendation of government to save india’s gold reserves…!!!

  • Anonymous

    Interest will be calculated on the value @ the time of deeposit. So, for your example, its on 3000/GMS. Just to add one thing here, you may say that then it will be loss, however on the other side, if by chance the GOLD prices slice down, still the interest calculation will be made on the 3000/Gms.

  • sandeep

    One thing that is not clear to me is how the interest rate is calculated.. Let us say for example, I deposit 1Kg of gold for 1year and roi is 1% .At the time I deposited the gold, the gold rate is 3000/ I deposited the gold worth 30Lakhs.. now after one year,lets say gold price is 4000/ my gold worth is 40Lakhs.. is the 1% interest calculated on 40Lakhs or 30Lakhs?

    • Chandrakant Mishra

      Hi Sandeep, Your intrest is calculated in gold value. Suppose You deposited 1000 gm gold with SBI. If intrest rate is 1% then after one year year your gold will become 1010 gm. Interest rate is not related to rate of the gold.

  • S Kumar

    It has been clearly mentioned that this scheme is for idle & outdated gold that will just be passed to heirs..certainly 500 gms is a deterrent.

    • Chandrakant Mishra

      Exactly S Kumar!

  • hema desai

    It is rubbish scheme. I have to melt my jewellery to earn 1% so I not only loose my labour cost but also design and to incur more cost on new one. Further for my gold with SBI I get 1% and if I need to take loan I will get it less than personal loan interest as if there r obliging me I still have to bear say 8% interest!!!!!!!!! And so much effort to fill banks pocket as the gold they will lend to jewellers will certainly commercial loan with minimum 14% interest. Sbi need to make scheme more attractive by passing on genuine benefits to customers. Otherwise it is flop show.

    • Chandrakant Mishra

      Hema You are right. Of course it is rubbish scheme for your beloved jewelry. But think about that outdated jewelry which you are not going to wear anyway. Think About the gold coins in your home. all these gold has only investment value. Weight of this gold will not increase by sitting in your locker or home irrespective of the value. But if you put your gold with SBI the weieght of gold also increases with price appreciation. Of course the increase of weight will be very less but something is always good than nothing. Also you have not be concerned about the security.

  • Chandrakant Mishra

    Interest rate is 0.75% yearly. therefore for six month it will be 0.375%. You should not purchase gold instead you will get more pure gold. At the time of redemption you will have the option of selling it too.

  • Vicky

    This is one of the Worst Deposit Schemes ever introduced. If you investigate on the Interest Percentage, you will come to find it. It is 0.75 for 3 years and 1% for 5 years.

    Also, you are not going to get the gold you invested, as it will be melt and converted. You may purchase high cost SBI Gold or get the cash. If you just let it idle in your home itself, it is going to get you more than 5% of growth per year. It is a method by the SBI / RBI to steal the public’s gold in the name of deposit.

    • Chandrakant Mishra

      Vicky I Would like to know how does your gold will grow lying idle in the home. However you well get your whole gold minus impurities. Whatever weight decreases it is not gold. even jewelers will do the same. Also if there is any price appreciation you will benefit from that also. Please let me know how it is more beneficial to have gold in your house.

      • Anonymous

        and secondly u will get interest on ur gold scehme also ,so u r being benefited from all the 4 sights;’;’

        • anonymous

          If gov consider it just a piece of metal then why it want it so much. Give us more interest rates instead of giving tax free, etc..

          • suriya

            good scheme. what is the present value of one gram gold in SBI. If redeemed for how much they will pay?