Gold Gathering Dust in Your Locker? Here’s How to Make It Work Financially
In many Indian households, gold is a treasured asset, often locked away in bank lockers or safes, rarely seeing the light of day. While it holds emotional and cultural value, financial advisors warn that idle gold offers no returns unless it’s put to work.
A certified financial planner explains that in a time of rising inflation and growing investment opportunities, letting your gold sit unused can be a missed financial opportunity.
💡 Smart Ways to Make Your Gold Work
1. Gold Loans
Instead of selling your gold, you can use it as collateral to get instant liquidity. Several banks and NBFCs offer gold loans at competitive interest rates. The process is quick, and the gold remains safe until repayment.
Best for: Short-term cash needs
Interest rates: Starting from 8–12% annually
Tenure: Up to 36 months
2. Sovereign Gold Bonds (SGBs)
If you're looking to earn returns on gold investments, SGBs issued by the RBI offer an attractive 2.5% annual interest plus potential capital appreciation.
Minimum investment: 1 gram
Tenure: 8 years (exit allowed after 5)
Tax benefit: No capital gains tax if held till maturity
3. Gold Monetization Scheme (GMS)
The Gold Monetization Scheme by the Government of India allows individuals to deposit their idle gold and earn interest up to 2.5%. Deposited gold is used productively by the banking system.
Interest: 0.5%–2.5% depending on tenure
Minimum quantity: 10 grams
Tenure options: Short (1–3 years), Medium (5–7 years), Long (12–15 years)
4. Digital Gold / Gold ETFs
Instead of physical gold, consider converting it into Digital Gold or Gold Exchange-Traded Funds (ETFs). These offer market-linked returns and better liquidity without the hassle of storage.
Available through: Mobile wallets, mutual funds, brokers
Benefits: No making charges, easily tradable, regulated
“Gold shouldn’t just be a symbol of prosperity. It should actively support your financial goals,” says the advisor.
✅ FAQs:
Q1. Is it better to take a loan against gold or sell it?
Taking a loan is preferable if you need short-term funds without parting with your asset. Selling may be better if gold prices are high and you don’t plan to use it again.
Q2. What is the minimum quantity required for the Gold Monetization Scheme?
The minimum deposit is 10 grams of raw gold (jewelry, coins, bars) in any form.
Q3. Are Sovereign Gold Bonds risk-free?
They are backed by the Government of India and offer assured interest, but market fluctuations can affect their value if sold before maturity.
Q4. Can I invest small amounts in gold digitally?
Yes, digital gold and gold ETFs allow investment starting from as little as ₹100 or 1 gram.
Q5. Is the interest from gold monetization schemes taxable?
Yes, interest earned is taxable under your income slab, though capital gains on maturity of SGBs are tax-free if held till maturity.
Published : On 7th July
Published : Pankaj
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