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Gold Savings Account: How GSA will make investments in gold easy, safe and rewarding

Apart from saving on locker rent, insurance etc to keep gold safely in their custody, the investors will also get returns on gold savings akin to that of the Gold Monetisation Scheme.

gold, gold savings account, gold investment, physical gold, Gold Monetisation Scheme, GMS, Sovereign Gold Bond, SGB, Interest on Gold Deposits, Tax Exemptions
This will not only make the gold investments cheaper, but without the concerns of keeping gold safe, it will make the investments safer also.

As common people in India – especially in rural areas – prefer gold as a saving instrument instead of relatively complex financial products, the government has proposed the introduction of Gold Savings Account (GSA) to save them from paying labour charges, taxes etc on buying gold jewellery, coins etc. This will not only make the gold investments cheaper, but without the concerns of keeping gold safe, it will make the investments safer also.

Apart from saving on locker rent, insurance etc to keep gold safely in their custody, the investors will also get returns on gold savings akin to that of the Gold Monetisation Scheme (GMS) to make the investment rewarding as well.

Features of the proposed GSA:

Regular Investments

Unlike the Sovereign Gold Bond (SGB), where the bonds are issued for certain days, GSA will accept deposits on a daily basis. An investor will be able to visit the bank branch offering GSA any day and deposit money equivalent to the price of at least 1 gm of gold on the day of deposit. Higher deposits in multiple of 1 gm of gold will also be accepted.

Deposit, Withdrawal in Gold

The entry in the GSA passbook will be made in terms of the amount of gold for which deposits are made. Purity and safety of gold deposits will be ensured by the government.

At the time of deposit, the amount of gold – for which money is deposited – will be credited in the pass book of the GSA holder.

Similarly, at the time of withdrawal, debit entry will be entered in the passbook in terms of the amount of gold that is withdrawn either in gold or in cash equivalent to the price of at least 1 gm of gold or in multiple of 1 gm of gold at the prevailing rate on the date of withdrawal.

Interest on Gold Deposits

Banks will pay interest on the weight of gold as per the balance available on the last day of the month at the same rate as paid to the deposits accepted under the GMS on a monthly basis.

Tax Exemptions

The holders of GSA won’t have to pay capital gain tax at the time of withdrawal especially if the withdrawals are made in gold.

So, apart from saving on charges for buying physical gold and bearing the costs to keep the gold safely, the holders of GSA will get interests on gold deposits and will also enjoy tax exemptions at the time of withdrawals as well.

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