Monetising your gold holdings: Have idle gold in lockers, home? 5 smart ways to make it work for you

For most Indian households, gold represents safety — a store of value kept securely in lockers. But increasingly, more Indians are discovering how to make idle gold work through loans, monetisation schemes, leasing options, and even digital gold funds.According to a Morgan Stanley report, cited by ET, Indian households collectively hold 34,600 tonnes of gold, valued at about $3.8 trillion as of June 2025 — nearly 88.8% of India’s GDP. With so much wealth lying unused, families are exploring multiple ways to earn from gold — from government-backed schemes to digital investments.

How to make idle gold work in 2025

Gold monetisation scheme in India: How to earn interest on idle jewelry

Launched in 2015, the Gold Monetisation Scheme (GMS) allows citizens to earn interest on their idle gold by depositing it with designated banks. Depositors typically earn 2.25–2.5% per annum for short-term deposits.Under the scheme, gold jewellery, bars, or coins (excluding those with gemstones) are submitted to authorised purity testing centres where they are assayed and melted. Depositors receive a certificate of deposit, redeemable in either gold or cash upon maturity.Since March 2025, the government has restricted the scheme to short-term deposits (1–3 years), discontinuing the medium- and long-term options. While this simplifies the process, it has reduced the scheme’s appeal for long-term savers.Participation remains limited. Shweta Rajani, Head – Mutual Funds at Anand Rathi Wealth, told ET, “The Gold Monetisation Scheme is ideal for those holding idle or broken gold that they don’t intend to use. It allows investors to earn risk-free returns while contributing to the broader economy, but it may not suit those emotionally attached to their jewellery, as the original form cannot be retrieved.”

Gold loans are increasingly popular among borrowers looking for quick liquidity without giving up ownership of their jewellery. Demand in 2025 has risen sharply due to “easy availability, minimal documentation, and rapid disbursal,” Mukesh Pandey, Director of Rupyaa Paisa told ET.Banks and NBFCs lend up to 85% of the market value of pledged jewellery (capped at 75% for loans above Rs 5 lakh, per RBI guidelines). The gold remains securely stored with the lender until repayment.Interest rates typically range between 9% and 15%, depending on the borrower’s profile. Additional charges may include processing fees, valuation costs, and penalty interest on delayed payments. Borrowers can choose EMIs, bullet payments, or overdraft-style repayment options.Failure to repay may result in auctioning the pledged gold, though lenders usually offer a 30–60 day grace period and multiple reminders before proceeding. Experts advise borrowers to use only RBI-registered institutions for transparency and safe storage, reported ET.

Gold leasing: Earn from jewellery without selling it

For those unwilling to part with their gold permanently, gold leasing offers a new way to generate passive income. Platforms like SafeGold enable investors to lend their gold to jewellers who use it as working capital. In return, investors earn annual yields of 2–5%, paid in grams of gold instead of cash, the ET report said.Unused or damaged jewellery is melted into 24-karat pure gold, recorded digitally in the investor’s name.“If you start the year with 100 grams of gold, you’ll end up with 105 grams depending on the yield that you earn,” explains Gaurav Mathur, founder and managing director of SafeGold.This model allows investors to benefit from rising gold prices while compounding returns in gold terms — turning idle ornaments into a steady source of gold-based income.

Gold ETFs and mutual funds: Safer, tax-efficient alternatives to physical gold

For investors seeking liquidity, transparency, and tax efficiency, converting physical holdings into Gold ETFs or gold mutual funds is a modern and secure choice.“Investors holding large quantities of gold and facing storage risks would be better off converting their holdings into ETFs or gold funds that ensure almost no security risk, better taxation and no making or markup costs,” says Vivek Banka, founder of GoalTeller, as quoted by ET.Gold ETFs track live gold prices and are taxed at a 12.5% long-term capital gains rate after one year.“Gold ETFs and funds can be sold instantly via a mobile app or trading account with T+1 settlement,” notes Yash Sedani, Assistant Vice President, Investment Strategy at 1 Finance.However, converting physical gold into ETFs requires selling the metal first, which can trigger capital gains tax. Sedani cautions that “conversion typically attracts capital gains tax if the gold is sold at a profit.”Despite this, digital gold products remain attractive for investors prioritising security and ease of access over emotional attachment.

Jewellery upgrades: A blend of style and smart finance

For many households, redesigning old ornaments has become a smart way to blend style with financial sense.“Think of old jewellery as sleeping capital, upgrading lets you use that capital, you don’t pay again for the same gold weight, you only top up for new design and craftsmanship,” says Ankur Daga, Founder and CEO of Angara.During festive seasons, jewellers often offer zero-deduction exchange schemes, helping customers retain most of their gold’s value. However, some melting losses (1–2%) and new making charges are unavoidable. Once melted, jewellery cannot be restored to its original form.As India’s relationship with gold evolves, households are rethinking how to manage this timeless asset. Whether through monetisation schemes, leasing platforms, digital investments, or smart redesigns, families are learning to make their idle gold earn.(Disclaimer: Recommendations and views on the stock market, other asset classes or personal finance management tips given by experts are their own. These opinions do not represent the views of The Times of India)