Gold Deposit Schemes What do they have in reserve for consumers?

"India has no reason to be described as a poor country, as it has 20,000 tonnes of gold. The gold available with the country should be put to productive use. These schemes show us the way forward in achieving this goal."

– Prime Minister Narendra Modi

"No one scheme or single way of buying gold is a total replacement of the other. Together, these options expand consumer choices. The healthy competition among forms of gold and the channels through which gold will be available to an average consumer will benefit the eco-system by raising standards, improving transparency and as a result generating trust in an industry that has huge employment and export potential."

– World Gold Council Managing Director Somasundaram PR

Gold-related investment or deposit schemes have been in the spotlight for over a year now. Many expert opinions have been shared in the media and the general consensus is that the country’s economy will greatly benefit from these schemes. These schemes are an attempt by the Government of India to reap benefits from the gold lying with the public as well as religious institutions including temples and trusts. Interestingly, apart from adding value to the national economy, the schemes also have a beneficial proposition for the general public, especially those who prefer to either invest their gold like real money and earn interest on the investment or monetise the gold and use it like cash in hand.

What follows is a quick analysis of three popular gold deposit schemes: a) Sovereign Gold Bonds Scheme (SGB), b) Gold Monetization Scheme (GMS), and c) Gold Coin/Bullion Scheme (IGC). A good understanding of the main points will help readers/consumers to make an informed choice if they are planning to avail the benefits of these schemes.