India is one of the largest consumers of gold worldwide. Gold’s value allows it to withstand major economic upturns and is thus considered a primary haven for investors. However, due to its substantial pricing, holding gold in large quantities at one go is financially challenging. That is where gold savings schemes come into play.
These schemes are offered by prominent jewellers. Moreover, the primary agenda of these schemes is to make purchasing gold simpler and more affordable.
A gold savings scheme essentially acts as a recurring bank deposit; except, in this case, the endgame is purchasing gold. Therefore, typical gold saving plans allow individuals to deposit a sum of money every month as instalments for a specific tenure. At the end of such tenure, the depositor in question can purchase gold from the concerned jeweller at a value that is equivalent to the aggregate deposit.
However, unlike a recurring deposit plan, a gold savings scheme does not offer any interest on the deposited sum. And so, jewellers provide a bonus to the total amount deposited in order to cover up for that interest deficit. Typically, most jewellers offer to pay the last instalment as a cash incentive or provide a discount on the last instalment.
For instance, Mukesh chose to invest in a gold savings scheme, wherein he makes a monthly deposit of Rs.6000 per month. As per the rules of that scheme, Mukesh will need to make 10 deposits in full, and the jeweller will offer a 90% discount on the last instalment.
Therefore, he effectively pays Rs. 60600 [(6000 x 10) + (6000 x 10%)] and enjoys a discount of Rs.5400. At the end of the tenure, Mukesh can purchase gold worth Rs.66000 while only paying Rs.60600.
That way, individuals realise the benefit of a recurring deposit plan while also remaining affixed to their ultimate motive of depositing, i.e. purchasing gold.
Few of the best gold investment schemes in India are listed below –
It is a gold scheme online. Therefore, individuals willing to subscribe to this plan need to enrol for the scheme and pay the instalments online.
The instalment amount ranges from Rs.1000 to Rs.1 lakh. Furthermore, subscribers to this gold savings scheme need to pay 12 monthly instalments and only after all 12 payments can they purchase the gold, as per the scheme’s rules.Additionally, after paying 12 instalments, individuals are eligible for a scheme promotion discount – the incentive for the plan.
Example: Geeta decides to invest Rs.5000 per month in the Jos Alukkas’ Easy Buy Gold Purchase Plan. Therefore, after 12 months, her aggregate deposit would stand at Rs.60,000 [5000 x 12].
She also received a scheme promotion discount of 90% on one month’s instalment. Ergo, she receives Rs.4500 as scheme promotion discount, which is added to her aggregate deposits. Hence, the value of gold she can purchase with a deposit of Rs.60,000 is Rs.64500.
The scheme lasts for 360 days. Individuals need to purchase the gold either online from Jos Alukkas’ website or offline from its showrooms after 30 days from payment of the last instalment but before completion of 365 days from the joining date. Moreover, scheme subscribers can purchase 22k pure gold jewellery using their matured amount.
The Tanishq Golden Harvest Scheme is one of the best gold saving scheme in India. Individuals can start investing in this savings plan for as low as Rs.2000 per month and in multiples of Rs.1000. Individuals must note that once they have chosen the instalment amount, they cannot change the same during its course.
Furthermore, individuals only need to pay their monthly instalments for 10 months after which the scheme will start maturing. Upon maturity, Tanishq will add a discount equivalent to 75% of one month’s instalment. However, if a scheme subscriber withdraws their deposits after 300 days, i.e. 10 months but prior to 365 days, then he/she shall be eligible for a discount ranging from 55% – 75%.
For instance, Rajesh invests Rs.4000 per month in the Tanishq Golden Harvest Scheme for 10 months. However, after paying all the instalments, he decides to withdraw the aggregate deposits on the 301st day. Therefore, he is eligible for a discount of 55%. Thus, the total value of his redemption stands at Rs.42,200 [40,000 + (4000 x 55%)].
Another crucial advantage of this gold savings scheme is that individuals can club their redemption value with any ongoing Tanishq offers to compound their benefits. Individuals can purchase 22k pure gold or 18k diamond-studded jewellery with the redemption value.
It is one of the most profitable gold saving scheme available in the market. Through this scheme, individuals can purchase both “in stock” and “out of stock” pieces of jewellery at discounted rates. In this case, “out of stock” pieces of jewellery will be manufactured and delivered to the individual in question on a specific future date.
A few advantages of this gold savings plan is it offers free maintenance of gold for life, a year’s insurance for free and also gold buyback guarantee. Moreover, individuals only get BIS Hallmarked 916 Gold under this scheme.
However, unlike other gold savings schemes mentioned above, in this case, individuals need to make the payment upfront in advance to avail the Smart Buy option. Individuals shall also note that the Smart Buy option is only available for pieces of jewellery that do not need resizing. For pieces of jewellery that do need resizing, individuals can avail the “Smart Buy + Customise” option.
Nevertheless, before jumping on the gold bandwagon, individuals must duly consider their financial footing and affordability as well as their investment objectives. Since a gold savings scheme might require a hefty investment, proper planning is quintessential.
Gold Schemes were announced in the 2015 budget to encourage the saving or deposit of idle gold in banks. This unused gold can then be lent to jewellers or used for other purposes. The programme requires the bank to pay interest to the depositor, and jewellers can borrow gold directly from banks. In this manner, our country may avoid spending on foreign reserves utilised for gold imports.
Gold schemes enable us to deposit, invest in, or purchase gold. Narendra Modi, India’s Prime Minister, has unveiled three gold schemes: the Gold Monetisation Scheme, the Sovereign Gold Bond Scheme, and the Gold Coin and Bullion Scheme.
A Gold Scheme operates as follows:
Q1. How can redemption for bank gold schemes be done?
With short term deposits it can be made in cash or gold, and long term can be redeemed only with cash.
Q2. Is there a scheme that Gold can be denominated in grams?
Yes. You can open the Gold Metal Loan Account.
Q3. What forms of gold can be deposited with the scheme?
Gold can be deposited in the form of coins, bars and jewellery.
Q4. Do these schemes have tax benefits?
Yes. The interest earned on these deposits are exempt from tax.
Q5. Can I break the lock in period?
Yes you can, but you would have to pay a penalty.