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CADo not store your gold in a bank locker... there is a smarter way to manage your gold...
There are two problems with bank lockers today:
1/ If there is a theft and you had say 500 grams of gold which is worth Rs 50 lakhs, the bank only gives you 100 times the bank locker rent... which means somewhere between Rs 2 to 5 lakhs only depending on the size of the locker...
2/ Most branches do not have vacant lockers and if you need one, you get on a waiting period...
There is a new way to keep your gold secure, which is the Gold Overdraft facility...
Using this, you submit your gold to the bank and ask the bank to give you an OD loan against it...
The bank will get your jewellery valued and keep it in its vault for safekeeping in its actual form as is - no melting - no changing...
And against the value of such gold, give you a facility to take a loan up to say 70% the value of the gold.
You only pay interest on such a facility if you use such a loan... and people choose to not overdraw from the OD... just use it as a record with the bank to keep their gold secure.
The bank also takes an insurance against that gold and gives you documentation against it in writing.
The charges for opening such a facility are say 1% processing fee and stamp duty.
So the insurance for your gold is essentially the processing fee that you pay, which can be for a longer duration if you have the gold OD sanctioned for longer and is not renewable every year.
Banks that offer these facilities are Union Bank, HDFC, Canara Bank, Federal Bank and several others.
The charges for Rs 35 lakh OD against a Rs 50 lakh gold in safekeeping would come to about Rs 35000, which is 1% of the OD amount.
The extra you pay over and above the locker rent may come to about Rs 30k per annum, or Rs 10k per annum if your processing fee is charged for a 3 year tenure, which is reasonable to cover the value of your gold.
It doesn’t work for everyone but definitely for those who want the psychological safety.
Mint did a great piece on this today! Highly recommend you go read.
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