Across households in India and beyond, there lies a hidden treasure — gold jewelry, bars, and coins sitting quietly in bank lockers or cupboards, untouched for years. Passed down through generations, bought for weddings or festivals, or acquired as a “safe asset,” this gold is often cherished sentimentally but left financially inactive.
However, in today’s inflationary and dynamic economic environment, idle gold is a missed opportunity. Financial advisors are now urging individuals to rethink their approach and treat gold not just as an emotional or cultural artifact, but as an asset that can actively contribute to wealth generation.
So how do you make your gold work for you in 2025? This article breaks down expert insights, innovative schemes, and practical strategies to unlock the potential of dormant gold.
The Problem: Gold as a Sleeping Asset
India alone holds more than 25,000 tonnes of private gold, most of which is locked away in vaults and jewelry boxes. Globally, this trend mirrors in countries like China, the Middle East, and parts of Europe.
“Gold is often considered a dead investment — it doesn’t earn interest, and people usually don’t sell it unless they’re desperate,” says Ananya Sen, a certified financial planner in Mumbai. “But that mindset is changing, and it should.”
The issue is not the ownership of gold — it’s that most gold owners do not leverage it. Unlike stocks, bonds, or even real estate, gold is rarely used to generate passive income or liquidity. That’s changing now, thanks to new financial products, government-backed schemes, and fintech innovation.
1. Gold Loan: Quick Liquidity Without Selling
One of the most straightforward ways to make idle gold work is by taking a gold loan. It allows you to pledge your gold jewelry or coins to a bank or NBFC and get a loan up to 75% of its value (depending on market rates).
Why it works:
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No need to sell the gold
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Lower interest rates compared to personal loans
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Fast processing with minimal paperwork
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Gold remains safe in the lender’s custody
Gold loans are ideal for:
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Funding education or business capital
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Managing short-term emergencies
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Consolidating high-interest debts
“People think gold loans are for emergencies or lower-income groups, but that’s a misconception,” says Sen. “It’s one of the most underrated financial tools.”
Tip: Compare lenders — interest rates range from 7% to 15%, and repayment flexibility varies.
2. Gold Monetisation Scheme (GMS)
Launched by the Government of India, the Gold Monetisation Scheme allows individuals to deposit gold and earn interest on it — just like a bank fixed deposit.
Key features:
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Accepts gold in any form: jewelry, coins, bars
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Offers interest ranging from 2.25% to 2.50%
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Tenure options: short (1–3 years), medium (5–7 years), and long term (12–15 years)
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Gold is refined and used by the government or banks for lending or reserve purposes
Your deposited gold earns interest in grams, not rupees, shielding it from inflation.
“Think of it like a gold savings account,” explains Rohit Mathur, a bullion analyst. “Instead of lying idle, your gold earns more gold.”
Important: Your original jewelry is melted and refined, so it’s not suitable for heirlooms with sentimental value.
3. Sovereign Gold Bonds (SGBs): The Smart Investor’s Choice
Sovereign Gold Bonds are government securities denominated in grams of gold. Instead of physically holding gold, you own a financial instrument that tracks the price of gold and earns 2.5% annual interest, paid semi-annually.
Why investors love SGBs:
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No storage worries
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Tax-free returns if held until maturity (8 years)
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Capital gains benefits
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Traded on stock exchanges for liquidity
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Guaranteed by the Government of India
“SGBs are the best way to enjoy both the safety of gold and the growth potential of a bond,” says Mathur.
These are ideal for long-term wealth creation, especially for those who want exposure to gold without buying jewelry or storing it physically.
4. Digital Gold: Gold 2.0 for the Tech-Savvy
Digital gold is gaining immense popularity among millennials and Gen Z. Through apps like PhonePe, Paytm, and Google Pay, you can buy, sell, and store pure 24K gold online — even in tiny denominations as low as ₹1.
Benefits:
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Instant liquidity
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Backed by actual physical gold
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100% secure vault storage by companies like MMTC-PAMP and SafeGold
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Can be converted to coins or bars and delivered to your doorstep
“It’s the most flexible way to invest in gold. Great for SIP-style micro investments,” says Neha Kulkarni, a fintech advisor.
Just ensure the platform is SEBI or RBI compliant, and read the fine print on fees.
5. Gold ETFs and Mutual Funds: Portfolio Diversification
If you’re a stock market investor, Gold Exchange Traded Funds (ETFs) and gold mutual funds are excellent tools to add gold exposure to your portfolio without physical hassles.
Gold ETFs trade on exchanges like any other stock and mirror the gold price. Gold mutual funds, on the other hand, invest in gold ETFs and are ideal for those unfamiliar with trading platforms.
Advantages:
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Low expense ratio
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No making or storage charges
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Transparent pricing
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Easy to exit or switch
“For serious investors, this is gold with brains,” says Arvind Rao, a certified wealth manager.
6. Convert Unused Jewelry Into Utility or Capital
Another often-overlooked strategy is to refashion or sell unused jewelry. Many households have broken, outdated, or unused gold items that serve no purpose but carry significant value.
Options include:
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Selling to certified jewelers or online platforms like CaratLane, Tanishq
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Refining and converting to modern wearable designs
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Using proceeds to invest in real estate, SGBs, or mutual funds
“Don’t let nostalgia trap you. If you have jewelry you’ll never wear, consider turning it into something productive,” advises Sen.
Always request purity certificates and weight documentation when converting or selling.
7. Combine Gold with Estate and Wealth Planning
Gold plays an emotional role in many cultures, often passed down through generations. But improper planning can lead to disputes, loss, or undervaluation.
Financial advisors recommend:
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Declaring gold assets in wills
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Valuating and documenting gold with proper receipts
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Using gold as part of a wealth succession strategy
In some countries, including India, gifting gold above a certain value is taxable, so expert consultation is crucial.
“Treat gold like any financial asset — with clarity, documentation, and intent,” says Mathur.
Real-Life Case Study: Making Gold Work
Meena Patel, a 45-year-old homemaker from Ahmedabad, had over ₹12 lakh worth of gold jewelry sitting unused. After attending a financial literacy session, she took the following steps:
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Deposited 300g into a Gold Monetisation Scheme – earning 2.5% interest annually
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Converted 100g into an SGB portfolio – targeting long-term tax-free gains
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Sold 50g of broken pieces – reinvested the amount into her daughter’s education plan
“Earlier, I thought gold was only for emergencies or weddings,” Meena says. “Now, it’s part of my investment portfolio.”
What Financial Advisors Say
According to most advisors, the key lies in changing the mindset. Gold isn’t just a security blanket or a fashion statement — it’s capital.
“The modern investor doesn’t let any asset sleep. Not real estate, not stocks, and certainly not gold,” says Arvind Rao.
Risks and Considerations
While all these strategies unlock gold’s value, each comes with caveats:
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Gold prices fluctuate, so market timing matters
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Loan repayment is essential to avoid losing your asset
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SGBs have lock-in periods — they’re not for short-term needs
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Selling jewelry can incur making charge losses
Always consult a SEBI-registered advisor or trusted financial planner before making big moves.
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Conclusion: Let Your Gold Do the Heavy Lifting
If your gold is gathering dust in a locker, it’s time to change your perspective. In 2025’s fast-moving financial world, every asset must serve a purpose — and gold is no exception.
Whether through earning interest, accessing loans, investing digitally, or diversifying your portfolio, gold can play a far more active role in your financial journey.
Because gold is not just wealth — it’s opportunity, if you know how to use it.
FAQs
Q1: Is it safe to deposit gold under government schemes like GMS?
Yes, the Gold Monetisation Scheme is backed by the Indian government and your gold is insured and stored securely. But note that jewelry will be melted.
Q2: What’s better — Gold Loan or SGBs?
Gold loans offer liquidity for emergencies, while SGBs are better for long-term passive income and capital appreciation. Choose based on your goals.
Q3: Can digital gold be trusted?
Yes, if purchased via regulated and trusted platforms like MMTC-PAMP or SafeGold, your digital gold is backed 1:1 by physical gold stored securely.
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