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Gold monetization scheme welcome step

Shitanshu Kapadia
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Gold monetization scheme welcome step

Gold monetization scheme

Introduction of Gold monetization scheme in budget 2015 is welcome step taken by government. India is largest consumer of gold. Gold monetization scheme will help to convert physical gold in to cash, this will boost spending and investments, at the same time it will also reduce imports of gold. Gold is unproductive asset today, this step will make this asset productive. Let’s discuss about Gold monetization scheme and its benefits to investor.

Gold Monetization Scheme

  • Gold Monetization scheme allows investor and jewelers to deposit physical gold with banks.
  • Metal deposit account will be opened for this purpose.
  • You can deposit any unused or broken jewelry into this account.
  • Every transaction done for physical gold will be recorded.
  • This facility allows investor and jewelers to earn additional interest on gold.
  • Investor or jewelers can also borrow money using this account.
  • Interest rate offered on gold deposit is not yet known, however it is expected that 4-5% interest will be offered on gold.
  • One can withdraw gold from this account anytime.
  • Bank and other dealers will also able to monetize this gold.

This Gold Monetization scheme will replace existing gold deposit and gold metal loan schemes.

Gold monetization scheme

Advantage of Gold Monetization scheme

  • This scheme will reduce dependence on imported gold.
  • As import will reduce it will enhance forex reserve and will help to control dollar price variation.
  • With reduction in dollar price inflation can be reduced.
  • This scheme will enhance productivity of gold as you can earn interest on gold deposit.
  • This scheme will pull household gold in to economy.
  • Gold monetization scheme will also boost GDP.

Sovereign Gold Bond & Gold Coin

  • Sovereign Gold Bond is alternate financial asset it will be alternative of gold purchase.
  • Sovereign Gold Bond will carry fix rate of interest.
  • Value of this bond will be likely to vary with respect to gold rates.
  • This bond will be redeemable in terms of original face value.
  • Indian Gold coin featuring Ashok Chakra will be made in India.

Advantage of Sovereign Gold Bond & Gold Coin

  • It will remove need to import gold for investment purpose.
  • Additional interest on gold bond is advantage to investor.
  • Introduction of Indian make Gold Coin will help to recycle gold available in country.
  • It will boost Make in India campaign.

According to me it is very good step taken by government of India to boost economy. Investor should participate in this scheme to avail multiple benefits.

Draft for gold monetisation is released by government recently. As per guideline given in draft following rules are applicable for gold moetisation scheme.

  • The minimum quantity of gold deposit allowed under this scheme is 30 grams.
  • Gold collected from customer will be send to test center for checking of purity level. Once test is completed, customer can either deposit this gold or take it back by paying minor fees.
  • Gold deposit certificate will be given to customer from bank. This certificate will contain information about amount and purity of deposited gold. Gold Saving Account will be opened
  • Interest will be paid on deposited gold after 30/60 days of opening the account. Interest rate will be decided by bank.
  • Principal and interest value will be valued in gold. If customer deposit 200 gm gold and get 1 % interest, then maturity has a credit of 202 gms.
  • Customer will be given option for redemption either in cash or in gold. This option should be selected at initial stage of gold deposit.
  • Minimum tenure of gold deposit is 1 year and can be extended in multiple of 1 year. You can break this deposit at any time.
  • No capital gain tax or income tax is applicable on this Gold saving account. 

LIC Jeevan Lakshya (Table 833) Details

Shitanshu Kapadia
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LIC Jeevan Lakshya (Table 833) Details

LIC Jeevan Lakshya

LIC Jeevan Lakshya (Table 833) is third launch by LIC in the month of March, 2015. LIC Jeevan Lakshya is limited premium endowment plan with profit. LIC Jeevan Lakshya policy is designed to provide annual income benefit to the policy holder family. Under this policy 10% of sum assured will be paid to nominee on every policy anniversary in case of unfortunate death of policy holder till maturity. On maturity again sum assured and bonus will be payable. Let’s take a closer look at LIC Jeevan Lakshya.

LIC Jeevan Lakshya Details

Eligibility:-

Minimum Age -18 Years

Maximum Age -50 Years

Basic Sum Assured – Minimum 1 Lac, Maximum – No limit

Maximum Maturity Age – 65 Years

Policy Term – 13 Years to 25 Years

Premium paying term – Policy term – 3 Years

E.g Policy term is 20 years, then premium paying term will be 20 years – 3 years = 17 years

Premium paying mode – Monthly, Quarterly, Half Yearly, Yearly 

LIC Jeevan Lakshya Benefits:-

Death Benefits:-

  • On unfortunate death of policy holder during policy term 10% of basic sum assured will be paid to nominee every year from year of death till maturity date of policy.
  • On maturity date nominee will be again paid by –

110% of sum assured + Bonus + Final additional Bonus (if any)

Maturity Benefits:-

  • If policy holder survives policy term and all premium dues have been paid then at the maturity following shall be payable.

Sum assured + Bonus + Final Additional Bonus (if any)

LIC Jeevan Lakshya Policy Riders:-

LIC Jeevan Lakshya provides following optional riders benefits on payment of extra premium.

  • Accidental death and disability benefit rider –

This rider benefit can be opted any time within premium paying term of policy. Accidental benefit risk cover is applicable during policy term only.

  • If this rider is opted amount equals to accident benefit sum assured will be payable in case of accidental death.
  • In case of accidental permanent disability of policy holder, basic sum assured will be divided and paid in terms of EMI spread over 10 years. Future premium will be waived off.

Maximum limit for Accidental rider is 1Cr.

  • Term Assurance rider –

Term assurance rider can be taken only at the time of taking LIC Jeevan Lakshya policy. Policy holder need to pay small additional premium amount for this rider.

  • If this rider is opted amount equals to term assurance rider sum assured will be payable in case of death.

Maximum limit for Term assurance rider is 25 Lac.

LIC Jeevan Lakshya Policy Illustration:-

Mr.Rohit purchase LIC Jeevan Lakshay Policy with following details.

Age -25 years

Policy term – 20 years

Premium paying term – 17 years

Basic sum assured – 10 Lac

Death Benefit: Suppose Mr.Rohit passed away after 5 years from the policy purchase date. Death benefit payable to nominee will be:-

  • From 6th year to 20th year nominee will be paid with sum of 1 Lac every year. (10% of basic sum assured).
  • At the end of policy term after 20 years nominee will receive 11 Lac (110% of sum assured) + Bonus

Maturity Benefit:- Suppose Mr.Rohit survive policy term maturity benefit payable to him will be:-

  • Maturity amount = 10 Lac + Bonus + Final Additional Bonus (if any)

Looking at first instance this policy seems to be attractive, however premium details are yet not available. I will update this post as soon as will get information about premium.

How you find LIC Jeevan Lakshya? Do share your views.

Jeevan Lakshya

Pradhan Mantri Suraksha Bima Yojana – PMSBY

Shitanshu Kapadia
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Pradhan Mantri Suraksha Bima Yojana – PMSBY

Pradhan Mantri Suraksha Bima Yojana

Pradhan Mantri Suraksha Bima Yojana is accidental death insurance scheme launched in budget 2015-16. Basic aim behind this initiative is to provide low cost insurance for all Indians, especially poor and under privileged. Let’s take a close look at Pradhan Mantri Suraksha Bima Yojana.(PMSBY)

Pradhan Mantri Suraksha Bima Yojana

Eligibility:-Pradhan Mantri Suraksha Bima Yojana is available to people in age group from 18 years to 70 years with bank account.

Bank account linked to Aadhar card is mandatory to take this insurance. Individual intended to take this insurance need to approach bank with simple application form. One needs to renew this policy every year before 1st June.

Premium:-Premium for this insurance is very low. You need to pay just 12 Rs/- per annum to avail this insurance. This is perhaps lowest premium we have ever seen for any insurance policy.

Payment Mode: – Premium will be automatically debited from your account. This is the only mode available for payment.

Risk Cover:-Pradhan Mantri Suraksha Bima Yojana provides accidental death risk cover of 2 Lac. It also provides coverage of 2 Lac for full disability.

Partial disability risk cover is up to 1 Lac. Although this sum is very low but could be helpful where the insurer is the only earning member of the family.

Term of Insurance: – Default term of this insurance is 1 year, however person wish to extend this policy for extended year can opt for the same. In this case insurer account will be automatically debited by bank.

Pradhan Mantri Suraksha Bima Yojana will be offered by all public sector general insurance companies and all other insurer. Final list of insurer offering this scheme is still awaited.

Should I buy Insurance under Pradhan Mantri Suraksha Bima Yojana?

Pradhan Mantri Suraksha Bima Yojana is boon for poor and under privilege people, who are intended to take insurance but unable to pay high premium. As per me everyone should take advantage of this scheme and opt for this scheme.

This is welcome step taken by government of India in order to provide social security to every citizen of India. Apart from this government has also announced various other insurance schemes in budget 2015 such as Pradhan Mantri Jeevan Jyoti Bima Yojana, Atal pension Yojana.

PMSBY

Note:- This scheme is launched on 9th May,2015 by Prime Minister Narendra Modi.

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