India is one of the largest consumers of gold worldwide. In the last quarter of the Financial Year 2019 – 20, gold prices witnessed a 2.6% YoY growth to record a price of Rs 41,124 per 10 grams. In April, due to the combined effect of surging global demand and weakening rupee-value, gold prices rose further to Rs 44,315 per 10 grams.
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.
What is a Gold Savings Scheme?
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.
What are Some of the Top Gold Investment Schemes in India?
Few of the best gold investment schemes in India are listed below –
- Jos Alukkas’ Easy Buy Gold Purchase Plan
It is an online gold savings scheme. 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.
Also, Read about Gold Investment
- Tanishq Golden Harvest Scheme
The Tanishq Golden Harvest Scheme is one of the best gold saving schemes 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, 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.
- Malabar Gold and Diamonds Smart Buy Plan
It is one of the most profitable gold savings schemes 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 of 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 of 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.