What It Means When You Withdraw Prematurely From Gold Monetisation Scheme

Gold Costs

If the choice at maturity is to go in for the redemption in gold then there is one more thing that the investor has to know. The gold redemption will be in multiples of 10 grams and any amount in excess would be paid in rupees. For example, if the weight of the gold being redeemed is say 52 gm, then 50 gm will be paid out in gold if this option is chosen and the remaining 2 gm will be paid in rupees.

In addition for the gold redemption, an amount equivalent to 0.5% of the notional redemption amount on the maturity date will be collected from the investor and paid to the bank to cover logistical and operational costs involved in the transaction. This will be an additional expense for the investor.

Overall Choice

When it comes to the overall choice for the investor, they should go for the gold option only when they need gold for consumption purpose but this will come with an additional cost and even here a small fractional part could still be received in rupees.

(Arnav Pandya is the founder, Moneyeduschool.)