Is India next hot destination for gold investment?

Is India next hot destination for gold investment?
Image credit: http://rappingmanual.com/
Sr. Features Writer, Entrepreneur India
3 min read
Opinions expressed by Entrepreneur contributors are their own.

You're reading Entrepreneur India, an international franchise of Entrepreneur Media.

With the advent of gold bonds in the Indian market, there is finally some hope for the dud deposits of gold jewellery in lockers that were spinning no revenues so far.

Three schemes, namely, the ‘Gold Monetization Scheme’, ‘Sovereign Gold Bond Scheme’ and ‘Gold Coin and Bullion Scheme’, were introduced by Indian Prime Minister Narendra Modi for all and sundry in the nation.

The hope is that these schemes will ultimately bring out the gold that is hoarded in lockers, homes and banks.  From a dud investment, gold holdings would become a productive asset and now they would no longer stand as a stagnant investment.

There is also a strong and a hopeful wave that the multitude of people emotional about their love for the yellow metal would want to hold gold as paper instead of its physical form.

But will Indians shun incredulity and invest in the schemes?

There is a strong probability that the ‘Gold Coin and Bullion Scheme’ will be a hit not just for gifting but more importantly it might pin the notion of ‘hoarding’ down to the ground. And, the gold use may actually begin to show productive prospects.

The monetization scheme is not simply depositing gold in a locker and be done with it. No! It’s truly exhaustive in procedures to prevent fraudulence. A depositor is required to deposit 30g gold at the bare minimum in the form of brick, coin, or jewellery.

The process also includes taking the gold to a purity-testing centre certified by the Bureau of Indian Standards (BIS) for melting purpose in league with testing the metal purity. Once the raw gold is melted and shaped into a brick/bar, which is done in the customer's presence, the individual has the option to take the bar or deposit it and take a certificate on behalf of the deposited gold.

This certificate can then be used to open a gold savings account with a bank. The gold deposit savings account can have different tenures-- short term (one-three years), medium term (five-seven years) or long term (12-15 years).

The interest for short-term deposits will be decided by the banks but the government has declared an interest rate of 2.25% for medium-term deposit and 2.5% for the long-term one.

With these new lucrative facts about monetizing the gold coming to fore, the hope to have hidden gold out of the filial closets for fiscal benefits is gaining momentum.

More from Entrepreneur

Get heaping discounts to books you love delivered straight to your inbox. We’ll feature a different book each week and share exclusive deals you won’t find anywhere else.
Jumpstart Your Business. Entrepreneur Insider is your all-access pass to the skills, experts, and network you need to get your business off the ground—or take it to the next level.
Create your business plan in half the time with twice the impact using Entrepreneur's BIZ PLANNING PLUS powered by LivePlan. Try risk free for 60 days.

Latest on Entrepreneur