The government has officially announced the discontinuation of the medium- and long-term components of the Gold Monetization Scheme, effective March 26, 2025. Originally launched in 2015 to encourage people to earn interest on their idle gold, the scheme is now being revised in response to shifting market trends and rising gold prices. While this move has raised concerns among investors and households, short-term deposits may continue through select banks. In this article, we’ll explain what this change means, why it happened, and what you can do next with your unused gold.
India Ends Medium & Long-Term Gold Monetization Scheme
Contents
- 1 India Ends Medium & Long-Term Gold Monetization Scheme
- 2 Why Did India Launch the Gold Monetisation Scheme?
- 3 How Can a Customer Deposit Gold Under the Gold Monetization Scheme?
- 4 Steps to Deposit Gold Under the Gold Monetization Scheme
- 5 What Experts Say About the Closure of the Gold Monetisation Scheme
- 6 Idle Gold Investment Ideas You Shouldn’t Miss
The government has decided to stop the medium- and long-term parts of the Gold Monetization Scheme, which was started in 2015 to help people earn from their idle gold. Due to high gold prices and new economic challenges, this change takes effect from March 26, 2025. However, banks may still offer short-term gold deposits for 1 to 3 years based on commercial viability. If you have unused gold at home, don’t worry—there are still many options like digital gold, Sovereign Gold Bonds, and Gold ETFs. Choosing the right one depends on your goals, so it’s a good idea to speak with a financial expert before making a move.
| Key Highlight | Details |
|---|---|
| Effective Date | March 26, 2025 |
| Discontinued Components | Medium-Term Deposits (5–7 years), Long-Term Deposits (12–15 years) |
| Continued Component | Short-Term Bank Deposits (1–3 years) |
| Gold Mobilized (Total) | 31,164 kg (as of November 2024) |
| Short-Term Deposit Gold | 7,509 kg |
| Medium-Term Deposit Gold | 9,728 kg |
| Long-Term Deposit Gold | 13,926 kg |
| Number of Depositors | Approximately 5,693 |
| Recent Gold Price | Rs 90,450 per 10 grams (as of March 25, 2025) |
| Gold Price Rise | Increased by Rs 26,530 or 41.5% from Rs 63,920 (January 1, 2024) |
| Official Announcement | Reserve Bank of India |
| Notice from Ministry | No new deposits accepted under MLTGD from March 26, 2025 |
| Existing MLTGD Deposits | Will continue until maturity as per current GMS guidelines |
Effective March 26, 2025, the Government will discontinue Medium-Term (5–7 years) and Long-Term (12–15 years) gold deposits under the Gold Monetization Scheme. Only Short-Term Bank Deposits (1–3 years) will remain, subject to commercial viability. As of November 2024, a total of 31,164 kg of gold was mobilized, with 7,509 kg in short-term, 9,728 kg in medium-term, and 13,926 kg in long-term deposits across 5,693 depositors. The RBI and Ministry of Finance announced no new MLTGD deposits will be accepted after the effective date. However, existing deposits will run until maturity. Gold prices surged to Rs 90,450 per 10 grams as of March 25, 2025—up 41.5% from January 2024.
Why Did India Launch the Gold Monetisation Scheme?
Launched in November 2015, the Gold Monetization Scheme (GMS) aimed to bring unused gold lying in homes and institutions into the formal banking system. The goal was to reduce India’s heavy dependence on gold imports and help improve the country’s current account balance.
People, trusts, and groups could take part in the Gold Monetization Scheme (GMS). It accepted gold in the form of bars, coins, and certain types of jewelry. People who put money in banks gained interest based on the type of deposit they made. Short-term deposits (1–3 years) had rates set by the bank, while medium-term deposits (5–7 years) or long-term deposits (12–15 years) had rates set by the government. You could put as little as 10 grams or as much as you wanted. The Gold Management Scheme (GMS) was an updated version of the Gold Deposit Scheme. Its goal was to get gold that was sitting idle into the official economy.
- Short-Term Bank Deposit (1–3 years): Offered by banks at commercially decided rates.
- Medium-Term Government Deposit (5–7 years): Government-backed with fixed interest.
- Long-Term Government Deposit (12–15 years): Also fixed interest, designed for longer holdings.
The scheme accepted a minimum of 10 grams of raw gold with no upper limit, making it accessible to both households and institutions.
How Can a Customer Deposit Gold Under the Gold Monetization Scheme?
As per the Reserve Bank of India (RBI) guidelines, any eligible individual can open a Gold Deposit Account with a designated bank after fulfilling the KYC (Know Your Customer) requirements. Once the account is set up, the customer needs to visit a Collection and Purity Testing Centre (CPTC) or a GMS Mobilisation, Collection & Testing Agent (GMCTA). At this center, the customer’s gold is tested for purity in their presence. Based on the purity results, the gold is converted into standard gold of 995 fineness, and a deposit receipt is issued. This receipt represents the value of the gold deposit and forms the basis for earning interest under the scheme.
Steps to Deposit Gold Under the Gold Monetization Scheme
Step 1: Open a Gold Deposit Account
Visit any designated bank and open a Gold Deposit Account by completing the required Know Your Customer (KYC) formalities.
Step 2: Visit an Authorized Collection Center
Take your gold to a certified Collection and Purity Testing Centre (CPTC) or an authorized GMS Collection & Testing Agent (GMCTA).
Step 3: Purity Check in Your Presence
The center will test the purity of your gold while you’re present, ensuring transparency in the process.
Step 4: Receive a Deposit Certificate
After testing, the gold is converted to a standard 995 purity level, and you’ll receive a deposit certificate indicating the quantity of pure gold deposited.
Step 5: Start Earning Interest
Your deposit will begin earning interest according to the terms of the scheme, based on the amount of pure gold deposited.
What Experts Say About the Closure of the Gold Monetisation Scheme
Experts highlight that the government’s decision to discontinue the Medium-Term and Long-Term Government Deposits under the Gold Monetisation Scheme (GMS) from March 26, 2025, reflects a shift in policy due to changing market dynamics and limited scheme performance. The Ministry of Finance clarified that only short-term gold deposits offered by banks will continue, while new medium and long-term deposits will no longer be accepted.
According to the RBI, all existing medium- and long-term deposits will remain unaffected and continue as per the original terms unless withdrawn early. While the RBI hasn’t issued a separate press note, it has updated its guidelines to reflect the change and confirmed that no renewals or new deposits under MTGD or LTGD will be allowed from the effective date.
Idle Gold Investment Ideas You Shouldn’t Miss
If you have gold at home that you haven’t used yet, make a list of all the jewelry, coins, and bars that you have. Check to see if any are part of old gold plans and read over their rules. Sovereign Gold Bonds, Gold ETFs, or Digital Gold are all ways to put your gold to work for you without having to store it physically. You can also sell your gold when prices are high, get a gold loan when you need money quickly, or make new designs out of old jewelry. Another smart use is to give gold as a gift at special events. Lastly, use the value to spread your money out among different businesses, such as real estate or mutual funds, for better long-term growth.
- Take Inventory: Start by listing all your unused gold jewelry, coins, and bars. This helps you assess what you can monetize or use.
- Review Past Gold Deposits (like GMS): If you’ve previously deposited gold, check interest earned, withdrawal options, and maturity status.
- Invest in Sovereign Gold Bonds (SGBs): These government-backed bonds give you yearly interest and gold price appreciation without holding physical gold.
- Explore Gold ETFs & Mutual Funds: These investment tools track gold prices and can be traded on stock exchanges—safe, liquid, and no storage needed.
- Use Digital Gold Apps: Platforms like Paytm, PhonePe, or Google Pay allow you to buy or sell gold in small amounts securely from home.
- Sell Gold When Prices Are High: If the market is favorable, selling idle gold could offer great returns. Use that cash for other goals.
- Get a Gold Loan: Need cash without selling your gold? Use it as collateral for a quick loan at competitive interest rates.
- Redesign or Repurpose Jewelry: Convert broken or old-fashioned pieces into new designs you’ll wear.
- Gift It Thoughtfully: Gold is a timeless gift for weddings, birthdays, or family traditions.
- Diversify Your Portfolio: Don’t keep all your wealth in gold—use proceeds to invest in mutual funds, real estate, or stocks to reduce risk and grow returns.
Frequently Asked Questions
What should I do after the discontinuation of the Gold Monetization Scheme’s medium- and long-term deposits?
The Government of India will discontinue medium- and long-term gold deposit schemes under the Gold Monetization Scheme (GMS) effective March 26, 2025, though short-term deposits (1–3 years) may still be offered by banks based on feasibility. If you hold idle gold or existing deposits, this is a good time to reassess your strategy. Consider shifting to alternatives like Sovereign Gold Bonds, Gold ETFs, or digital gold, which offer interest income, market exposure, and liquidity. For optimal financial outcomes, it’s wise to consult a professional advisor to align your choices with your long-term wealth goals.
How Do I Start Depositing Gold Under the GMS Scheme?
To deposit gold under the Gold Monetization Scheme, first open a Gold Deposit Account with a designated bank after completing KYC formalities. Then, visit an authorized Collection and Purity Testing Centre (CPTC) or GMCTA, where your gold will be tested for purity in your presence. Once verified, it’s converted to 995 fineness standard gold, and you’ll receive a deposit receipt. This receipt allows you to start earning interest as per GMS rules.
What are the steps to deposit gold under the Gold Monetization Scheme?
Open a Gold Deposit Account at a designated bank, visit an authorized CPTC/GMCTA, get your gold purity tested in your presence, receive a deposit certificate for 995 purity gold, and start earning interest as per the scheme terms.
How do I put gold into the Gold Monetization Scheme?
You must open a Gold Deposit Account at a certain bank, go to an authorized CPTC/GMCTA, and have the purity of your gold tested in person. You will then be given a deposit certificate for 995 purity gold and can begin earning interest according to the terms of the plan.
What can I do with unused gold at home?
Make an inventory of your gold items and check if any are tied to old schemes. You can invest in Sovereign Gold Bonds, Gold ETFs, or Digital Gold, sell during high prices, take a gold loan for quick funds, redesign old jewelry, or gift it on special occasions. You can also use the value to diversify investments into real estate, mutual funds, or other assets for long-term growth.