India is one of the largest consumers of gold in the world. Millions of families keep gold jewellery, coins, and bars at home for years without earning any return. To make this idle gold productive, the Government of India introduced the Gold Monetization Scheme (GMS). Under this scheme, individuals and institutions can deposit their gold with authorized banks and earn interest on it.
If you are searching for Gold Monetization Scheme 2026, Gold Monetization Scheme interest rate, Gold Monetization Scheme calculator, Gold Monetization Scheme SBI interest rate, or Gold Monetization Scheme PNB, this guide covers everything you need to know with the latest updates.
One important change is that from 26 March 2025, the Government discontinued fresh Medium-Term Gold Deposits (MTGD) and Long-Term Gold Deposits (LTGD). However, Short-Term Bank Deposits (STBD) under the Gold Monetization Scheme continue through eligible banks, with interest rates decided by individual banks. Existing MTGD and LTGD deposits remain valid until maturity.
What is the Gold Monetization Scheme?
The Gold Monetization Scheme (GMS) allows individuals and institutions to deposit their unused physical gold with participating banks instead of keeping it locked in lockers or at home.
After depositing the gold, it is tested for purity and converted into standard gold. The depositor receives a Gold Deposit Account and earns interest during the deposit period.
The main objectives of the scheme are:
- Reduce idle household gold
- Lower India’s dependence on gold imports
- Increase domestic gold availability
- Help banks mobilize gold deposits
- Allow customers to earn returns on unused gold
The scheme accepts:
- Gold jewellery (excluding embedded stones)
- Gold bars
- Gold coins
The minimum deposit is 10 grams, while there is no upper limit.
Gold Monetization Scheme 2026 Latest Update
Many investors ask, “Is the Gold Monetization Scheme still active?”
Yes, the scheme is still active in 2026.
However, only the Short-Term Bank Deposit (STBD) is available for fresh deposits.
The Government discontinued fresh:
- Medium-Term Government Deposit (MTGD)
- Long-Term Government Deposit (LTGD)
from 26 March 2025.
Banks continue offering Short-Term Gold Deposits for periods generally ranging from 1 to 3 years, while the applicable interest rate is decided by each participating bank. Existing government deposits continue without any impact until maturity.
Gold Monetization Scheme Interest Rate 2026
The Gold Monetization Scheme interest rate depends on the type of deposit.
Current Structure
| Deposit Type | Availability | Interest Rate |
|---|---|---|
| Short-Term Bank Deposit (STBD) | Available | Bank decides (generally around 0.5%–2.5% p.a.) |
| Medium-Term Deposit | Closed for fresh deposits | Existing deposits continue at 2.25% |
| Long-Term Deposit | Closed for fresh deposits | Existing deposits continue at 2.50% |
Banks may revise STBD interest rates periodically depending on market conditions. Therefore, investors should verify the latest rate before opening an account.
Gold Monetization Scheme Calculator
A Gold Monetization Scheme Calculator helps estimate the total interest you can earn on deposited gold.
Formula
Interest = Gold Value × Interest Rate × Time
Example
Gold Deposited = 200 grams
Gold Price = ₹9,500 per gram
Total Gold Value
200 × 9,500 = ₹19,00,000
Interest Rate = 2%
Time = 2 Years
Interest Earned
₹19,00,000 × 2% × 2
= ₹76,000
Actual returns may differ depending on the bank’s applicable interest rate, tenure, compounding policy, and redemption option.
Gold Monetization Scheme Interest Rate Calculator
When using a Gold Monetization Scheme Interest Rate Calculator, keep these details ready:
- Weight of deposited gold
- Purity of gold
- Current gold price
- Bank interest rate
- Deposit tenure
The calculator estimates:
- Total deposit value
- Annual interest
- Total maturity amount
- Estimated returns
Since bank rates vary, always use the latest interest rate announced by your bank.
Gold Monetization Scheme is Available in Which Bank?
Several scheduled commercial banks have been authorized to offer the Gold Monetization Scheme.
Some participating banks include:
- State Bank of India (SBI)
- Punjab National Bank (PNB)
- Bank of Baroda
- Indian Overseas Bank
- HDFC Bank
- ICICI Bank
- Union Bank of India
- Yes Bank
Banks may update branch availability over time, so confirm participation with your nearest branch before visiting.
Gold Monetization Scheme SBI Interest Rate
Many investors search for Gold Monetization Scheme SBI Interest Rate.
Currently:
- SBI accepts only Short-Term Bank Deposits (STBD) under the Gold Monetization Scheme.
- Medium-Term and Long-Term fresh deposits are no longer accepted.
- The interest rate for STBD is determined by SBI and may change periodically based on market conditions.
Before depositing gold, customers should contact their nearest SBI branch for the latest applicable rate and eligible branches.
Gold Monetization Scheme PNB
Punjab National Bank (PNB) is one of the designated banks that has participated in the Gold Monetization Scheme.
PNB provides:
- Gold Deposit Accounts
- Purity testing through authorized centres
- Short-Term Gold Deposits
- Interest on deposited gold
Customers can deposit eligible gold after purity verification and account opening, subject to the bank’s prevailing terms and conditions.
Who Can Apply?
The following are eligible:
- Individuals
- Hindu Undivided Families (HUF)
- Trusts
- Companies
- Partnership firms
- Charitable institutions
- Mutual Funds
- Government organizations
Joint accounts are also permitted.
Documents Required
Applicants generally need:
- Aadhaar Card
- PAN Card
- Address Proof
- Passport-size photographs
- KYC documents
- Gold for purity testing
Banks may ask for additional documents depending on the applicant category.
How to Apply for Gold Monetization Scheme
Step 1
Visit an authorized bank branch.
Step 2
Submit KYC documents.
Step 3
Take your gold to an authorized Collection and Purity Testing Centre.
Step 4
The purity is tested.
Step 5
After your consent, the gold is melted and evaluated.
Step 6
A Purity Certificate is issued.
Step 7
The bank opens a Gold Deposit Account.
Step 8
Interest starts accruing according to the applicable terms.
Benefits of Gold Monetization Scheme
The scheme offers several advantages:
- Earn interest on idle gold
- Safe storage through banks
- Lower risk than keeping gold at home
- No maximum deposit limit
- Government-backed framework
- Helps reduce gold imports
- Can improve utilization of household gold
It is particularly useful for families with jewellery that is rarely used.
Risks and Limitations
Before investing, consider these points:
- Jewellery is melted after purity testing and cannot be returned in its original design.
- Short-term interest rates vary across banks.
- Limited branch availability in some regions.
- Emotional or antique jewellery may not be suitable for deposit.
Understanding these factors helps in making an informed decision.
Is Gold Monetization Scheme Better Than Keeping Gold at Home?
If your jewellery is only stored and never used, the Gold Monetization Scheme can generate additional income through interest while keeping the gold within the banking system.
However, if your jewellery has sentimental, artistic, or heirloom value, depositing it may not be appropriate because the ornaments are melted during the process.
The decision depends on whether you value financial returns or preserving the jewellery’s original form.
Frequently Asked Questions (FAQs) Gold Monetization Scheme
– Is Gold Monetization Scheme still active?
Yes. As of 2026, the scheme continues through Short-Term Bank Deposits. Fresh Medium-Term and Long-Term deposits are discontinued.
– What is the minimum gold required?
The minimum deposit is 10 grams.
– Which gold can be deposited?
Gold jewellery (without stones), coins, and bars are eligible.
– Which bank offers the Gold Monetization Scheme?
SBI, PNB, Bank of Baroda, Indian Overseas Bank, ICICI Bank, HDFC Bank, Union Bank, Yes Bank, and other designated scheduled commercial banks participate, subject to branch availability.
– Can I get my jewellery back?
No. The deposited jewellery is melted after purity testing. At maturity, redemption follows the applicable scheme terms and bank policy.
– Is the interest taxable?
Historically, the scheme has provided tax benefits under applicable government notifications. Investors should consult the latest tax rules or a tax advisor for their specific situation.
Conclusion
The Gold Monetization Scheme 2026 remains a practical option for individuals who own unused physical gold and want it to generate returns instead of lying idle. While the Government has discontinued fresh Medium-Term and Long-Term deposits, the Short-Term Bank Deposit (STBD) continues to be available through eligible banks.
Before investing, compare the latest Gold Monetization Scheme interest rates, verify participating branches, and use a Gold Monetization Scheme calculator to estimate potential earnings. If you have gold that is unlikely to be used and you are comfortable with the fact that jewellery is melted during processing, the scheme can be a sensible way to earn interest while contributing to the productive use of India’s gold reserves.
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Manoj Talukdar is a content writer and researcher at Assam Guwahati, focusing on government schemes, Assam-related updates, education, finance, and public welfare programs. Through assamguwahati.com, he publishes informative articles, guides, and scheme updates to help readers understand benefits, eligibility requirements, and application procedures.