Almost all Jewellers offer a gold savings scheme, some call them as Bhishi Yojana, some as Kitty and some by any other names but at the end they are all the same with some minor differences.
Now our discussion point is “Are these savings scheme worth investing”?
First lets have a look at the interest rates chart and amount returned by SBI Bank, a Co-Operative Bank and from Jewellers after 1 year.
| SBI | Co-Operative Bank | Jeweller |
| 6.75% | 9% | 15.32% |
| Monthly Deposit : 1000 | Monthly Deposit : 1000 | Monthly Deposit : 1000 |
| Interest Paid: 448 | Interest Paid: 601 | Interest Paid: 1000 |
From the above table we can see that the interest percentage offered by Jewellers is almost double. So by looking at the table we can say that the Gold Savings schemes offered by Jewellers is really worth investing.
But, we recommend you to opt for the schemes only when, you have plans to buy Gold Jewellery in next 2-3 years. This is mainly because most jewellers do not allow you to buy pure gold and allow you to buy Gold Jewellery Only as they have margins attached with this. So when you know that you will surely be buying Jewellery for your Daughter’s Marriage or Gifting your Spouse or for some other reasons then it is surely worth buying as you can consider that you have been straightaway offered a 15% discount on your purchase because you were to buy it anyway.
However there are some things that you should take care while opting for such schemes like:
- Always opt for these schemes from a genuine jeweller, not necessarily renowned or big jeweller but genuine, because it is equally important that the jewellery you are buying is of good grade and hallmarked as well. Otherwise you may end up losing money on gold purchase.
- Always opt for a fixed price jeweller or atleast a jeweller of whose making charges you are familiar with and check that he applies you same rates while normal direct buying and while buying with gold saving scheme benefit. It should not happen that he is applying high making charges just because you are being given a 15% discount. Always bargain harder, after all that is your right.
- Buy from only those jewellers who gives you a proper printed receipt for every installment with authorised signature and not just a single piece of paper just adding your installment amount. It helps you keep track of your instalment dates and also gives you a proof that you have deposited money with him, just in case if you need them in case of any clashes.
- Preferably buy from only those jewellers who reminds you of every installment through automated messages or emails and also remind you of your account maturity and closure date. Because for every single month you delay your buying, you benefit interest rate falls drastically.
- Always have a clear idea that how much gold will you be buying and invest accordingly for maximum benefit. For e.g if you want to purchase say for e.g 30gms of gold in your daughter’s marriage after 1 year then you must accumulate at least around 90 thousand rupees so for 1 year scheme you should be starting a scheme with monthly installment of rs 7000. In this way you will be getting maximum benefit.
- And Last but not the least, do read the scheme related information before investing in the scheme.
You must also keep in mind that there are minor differences between the scheme offered by different jewellers which may drastically affect the effective interest rates. The table below will show you effective interest percentage that you will get on different scheme variants.
| Scheme Tenure/ No Of Installments(In Months) to be paid by us | Buying in Month | Benefit Given | Effective Interest Rate | Comments |
| 10 | 11 | 700 | 15.2 | We can buy immediately after scheme tenure ends |
| 11 | 12 | 1000 | 18.1 | We can buy immediately after scheme tenure ends |
| 12 | 13 | 1000 | 15.3 | We can buy immediately after scheme tenure ends |
| 12 | 14 | 1000 | 13.28 | Jeweller pays our 13th installment and we buy in 14th month |
| 15 | 16 | 1000 | 9.96 | We can buy immediately after scheme tenure ends |
| 18 | 19 | 2000 | 14 | We can buy immediately after scheme tenure ends |
| 18 | 21 | 2000 | 11.4 | Jeweller pays our 19th & 20th installment and we buy in 21th month |
| 24 | 25 | 2000 | 8 | We can buy immediately after scheme tenure ends |
| 24 | 25 | 3000 | 12 | We can buy immediately after scheme tenure ends |
| 24 | 28 | 3000 | 9.5 | Jeweller pays our 25th & 26th & 27th installment and we buy in 28th month |
The schemes variants marked in green and orange are worth buying and you should stay away from schemes highlighted in red. Instead you should go for Bank FD or any other investment option.
Conclusion:
Gold schemes offered by jewellers are good option only when you have plans to buy jewellery in 2-3 years and provided you wisely select the proper plan which does not fall under the red categories marked in the above table and properly follow the instructions provided in “things that you should take care” in above discussion.
Thank you and do share your comments and feedback in the below section.
I will be soon writing a new blog post about the TOP 5 Jewellers offering savings schemes with a detailed review on them. Hang on till then.