SBI Gold Deposit Scheme (GDS)Review

 

SBI Gold Deposit Scheme (GDS) Review

SBI Gold Deposit Scheme has been launched on 1st March 2010. And up to now, it has attracted more than 4000 kg of gold from the depositors from all around India mainly from Gujarat.

SBI Gold Deposit Scheme (GDS)

According to scheme clients have to deposit minimum 500 gm of gold with a lock in period of 3-5 years. The gold put in by clients is liquefied and converted into pure gold bars. Interest earned on 3 year deposits is 1%, 1.25% for 4 years and 1.5% for 5 years. The gold bars are sold by the bank to the public.

Well, yes. Keep in mind that when you deposit your gold ornaments, coins or jewellery, everything will be melted and converted into pure gold bars. So don’t think that this is a scheme to deposit your jewellery. Only deposit your jewellery if you don’t want it back. Of course, you will get it back but the gold not your original jewellery.

Gold Deposit Scheme (GDS) is in the nature of a fixed deposit in gold. The customers can deposit their idle gold under GDS which will provide them safety, interest earnings, tax benefits and a lot more.

Main features of GDS, in brief, are:

Purpose:

• To mobilize the idle gold in the country and put it into productive use.
• To provide the customers an opportunity to earn interest income on their idle gold holdings.

Eligibility:

Any Resident Indian of the following categories:

(i) Individuals, singly or jointly (as Former or Survivor)

(ii) HUFs

(iii) Trusts

(iv) Companies

Minimum Quantity: 500 Grams

Period of Deposit: 3, 4 or 5 years

Rate of Interest and Payments

• The current interest rates are: 1% p.a. for 3 years, 1.25% for 4 years and 1.50% for 5 years.
• Interest is calculated in Gold currency (XAU) and paid in equivalent rupees.
• Interest rate is subject to change.

Option for Interest Payment: Non-Cumulative (on 31st March) every year or Cumulative (On Maturity)

Acceptance of Gold:

• Gold i.e. Gold bars, Coins, Jewellery etc. will be accepted in scrap form only.
• Customers to submit Application Form, Identification Proof, Address Proof and Inventory Form.

Provisional Receipt issued at the time of acceptance of gold.

Issue of Gold Deposit certificate:

• Gold Deposit Certificate will be issued by Nodal Branch (i.e. Bullion Branch, Mumbai) after the gold is melted, assayed and minted at India Govt. Mint (IGM).
• The certificate will be issued for pure gold contents (i.e. in 999 fineness)
• Multiple certificates (max 5) can be issued

Gold Deposit Certificate (GDCs) will be sent to the depositor within 90 days from the deposit of gold.

Effective Date:

Date of assay certificate of IGM or 30 days of receipt of gold whichever is earlier

Renewal:

Can be renewed any time after maturity provided the renewal is for a future period for the term and interest rate .

Loan Facility:

Rupee loans available at any branch of SBI upto 75% of the notional value of gold.

Tax Benefit:

Exemptions from Income Tax, Wealth Tax and Capital Gains Tax available.

Where You have to Deposit Gold?

You can deposit Gold in 52 selected branches of SBI across the country.

Ahmedabad Circle: Ahmedabad Main, Baroda Main, Rajkot, Surat,

Bangalore Circle Bangalore Main, Belgaum, Mangalore,

Bengal Circle: Burdwan, Kolkata Main, Howrah,

Bhopal Circle: Bhopal Main, Gwalior, Indore Main

Bhubaneswar Circle: Bhubaneswar, Cuttack,

Chandigarh Circle: Amritsar, Chandigarh, Jallandhar, Jammu, Ludhiana,

Chennai Circle: Annasalai, Chennai Main Branch, Coimbatore, Madurai,

New Delhi Circle: Deharadun Main, Agra Main, Jaipur Special,

Meerut Cantt. Chandni Chowk Delhi,PBB-New Delhi,

Hyderabad Circle: Hyderabad, Secunderabad, Tirupati, Vijaywada,

Vishakhapatnam,

Trivandrum Circle: Calicut, Ernakulam, Trichur, Trivandrum,

Lucknow Circle Kanpur Main, Lucknow Main, Moradabad, Varanasi,

Mumbai Circle: Mumbai Main, Nagpur, Panaji, Pune, Shivaji Park,

Bullion Branch Mumbai

Patna Circle: Patna Main, Ranchi.

North East Circle: Guwahati

Documents:

• Identity proof
• Address proof
• Photograph

(Similar to opening of any deposit account)

You are also required to submit :

• Application Form,
• Nomination Form (in case of single individual),
• ECS Form (for credit of interest direct into your account),
• Inventory Form (giving description of gold, No. of pieces and weight of gold after preliminary checking of purity).

What is the Redemption Procedure?

You have to submit the original certificate, duly discharged on the reverse, to reach the Nodal Branch one month before the maturity (15 days if repayment is in cash).

The principal quantity of deposit will be paid in gold or cash, as per the option given in Application Form.

If payable in gold, the fineness will be either 995 or 999 as per Bank’s option. Any fraction quantity (say below 10 gms) will be paid in equivalent rupees.