Family can pull out of gold scheme in case depositor dies, says RBI

Investor's heirs need not wait any more for lock-in period to expire

The Reserve Bank of India (RBI) on Thursday allowed premature withdrawal of deposits under gold monetisation scheme before the lock-in period, in case the original depositor died.

Premature withdrawal from the scheme was allowed but not before the lock-in period of three and five years, depending upon the duration of the original scheme.

However, in case the depositor dies, the family members can withdraw the deposits, foregoing some interest.

In the case of medium-term gold deposit scheme (MTGD), where the lock-in period is three years, if the deposits are withdrawn within six months, no interest will be paid. For withdrawal between six months to one year, the applicable rate would be the original interest rate (currently at 2.25 per cent) minus 1.25 per cent. Withdrawal between one year to two year would see deposit rates falling by 1 per cent, between two years and three years the interest rate received would be applicable rate minus 0.75 per cent.

Similarly, for a long term gold deposit scheme (LTGD), for which the lock in period is 5 years and applicable interest rate 2.50 per cent, no interest would be paid for withdrawal within one year of making the deposit.

Withdrawal between one year to two years would see interest rates falling by 1 per cent, for two years to three years, minus 0.75 per cent and for withdrawal between three years and five years of the deposits, the interest rate payable would be 0.25 per cent less.

The MTGD and LTGD deposits run for 5-7 years and 12-15 years. Therefore, even after the lock-in period, if deposits are withdrawn, they would be premature withdrawal.

In those cases too, depositors will have to pay a penalty, applicable even for the family members of the deceased depositors.