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 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 scheme essentially acts as a recurring bank deposit; except, in this case, the endgame is purchasing gold. Therefore, typical gold 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 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 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.
| Old Gold | New Gold |
|---|---|
| Price Tag | Price Tag |
| 3 | 6 | 9 | 12 |
|---|---|---|---|
| M | M | M | M |
| 20% | 40% | 60% | 80% |