Bonds, Currencies & Commodities
Gold Savings Scheme from jewellers: What you need to know

Many jewellers offer gold savings schemes wherein you pay specific number of instalments to get bonus added by the jeweller at the end of the period. Find out the different offers available today and what you need to be aware of before signing up

Jewellers offer schemes like Tanishq (Titan Industries) Golden Harvest Jewellery savings scheme wherein you pay in instalments for fixed duration (11 months) and the jeweller will pay the last instalment. With this amount you can buy gold anywhere in India from any Tanishq showroom at the end of the year. The payment of last instalment works out to be over 15% return on your scaled investment in the golden harvest scheme. There is no tax deducted and no regulatory hassles like Know Your Customer (KYC) norms.

 

Many jewellers are offering similar Gold Savings Scheme (GSS) and they are popular as high gold price preclude those without lump-sum cash to make a big purchase. Before you sign-up, you need to know the risk factors and understand the alternate options to jeweller GSS.

 

The inherent drawbacks with GSS include

  • Being at the mercy of gold prices at the end of scheme term – If gold prices are higher at the end of your agreed term with jeweller than the period you made instalment payments, you won’t gain much with GSS.

 

  • High making charges from reputed jewellers selling branded jewellery - There is huge variance in jewellery making charges between different jewellers, but you cannot negotiate it when you are buying under GSS. There are normally 12% to 20% making charges and wastages; some jewellers charge almost 30% making charges for intricate jewellery. Check if the scheme allows low or no making charge for plain gold jewellery. For example, GRT jewellers Gold Tree scheme specifies “No making charge for plain gold jewellery (except special design and Nages items)”.

 

  • There are no options for buying gold or silver coins, bars, solitaire at end of the term - You can only buy jewellery at their stores.

 

  • Terms and Conditions (T&C) for missed payment or premature withdrawal – Need to understand it as well as other fine print. For example, Tribhovandas Bhimji Zaveri Kalpavruksha Plan is for buying 22kt gold, diamond or platinum jewellery while Tanishq Golden Harvest scheme allows you to buy 18kt diamond and 22kt gold jewellery.

 

  • There is no regulator for GSS offered by jewellers - If you risk a small jewellery shop to take your instalments, you risk a huge loss if you find that the jeweller shut the shop. Clearly, GSS is for those who want to make gold jewellery in near future and not for investors. It is not for putting large chunk of your savings.

 

Jeweller

PC Jewellers

Tribhovandas Bhimji Zaveri

Gitanjali group

Gitanjali Jewels

Tanishq

GRT jewellers

Scheme name

Jewels for less

Kalpavruksha

Shagun

Tamanna

Golden Harvest

Gold Tree

Your instalments in months

12

12, 15, 18, 24

11, 21, 30

12

11

15

Jeweller’s bonus instalment in months

2

1, 1.5, 2, 3.5

1.5, 4.5, 9 for diamond, 1, 3, 6 for gold

2 for diamond, 1 for gold

1

1 plus cash incentive of 40% of one month instalment

Source: Jeweller website

 

Another kind of GSS allows you to lock the gold price at each instalment payment to avoid the drawbacks explained above. While this is good for the customer as you are actually doing a gold SIP (systematic investment plan), the jeweller usually will not offer any incentive like payment of last instalment. This is because the jeweller cannot use your instalment payment as a float in this case. They have to buy the gold and keep it aside for you or take huge risk of using the float with the hope that gold prices will reduce at the end of the term so that he can easily buy gold from your payments and give it to you.

 

Some may offer reduction in making charge to lure you into this type of GSS. Gitanjali group offers Swarna Mangal scheme which offers a carrot of 30% discount on making charges of the jewellery that you purchase. If you don’t find the incentive attractive, why would you risk by letting the jeweller lock-in the gold rate without giving you physical gold delivery. You would do well by taking physical gold delivery rather than opt for such type of GSS.

 

Moneylife had done a survey last year for cover story on gold. Almost half of the respondents were aware of jewellery GSS offered by jewellers such as Titan, but surprisingly only 15%would invest in such schemes and it was more for ease of payment rather than better returns or tax savings.

 

What are the other options GSS customers can turn to? Most of the Gold ETFs, FoF (fund of funds) do not offer physical delivery of gold and hence can be ruled out. E-Gold does allow physical delivery, but it along with Gold ETF needs a demat account and hence brokerage for buying and selling.

 

In the next article, we will give couple of new, innovative non-jeweller options for GSS customers.

 

Read -  http://moneylife.in/article/gold-deposit-scheme-what-you-need-to-know/30132.html

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COMMENTS

Nilesh KAMERKAR

4 years ago

Perhaps the most important thing to know is . . . How to say NO to these Gold Savings schemes.

RTI Judgement Series: PIO cannot deny information under Section 11 and Section 7(9)

The PIO was reprimanded for denying information in a casual manner by using Section 11 and Sect 7(9). This is the tenth in a series of important judgements given by Shailesh Gandhi, former CIC that can be used or quoted in an RTI application

 
The Chief Public Information Officer (CPIO) of the Aligarh Muslim University was reprimanded for denying information in a casual manner and using Section 11 and Section 7(9) of the Right to Information (RTI) Act. While giving this judgement, Shailesh Gandhi, former Central Information Commissioner said “...the denial of information on the basis of these two sections was without any basis in law and denial of information can only be under Section 8(1) or Section 9”.
 
“The PIO will give the information to the appellant before 25 January 2009. He is also warned that denying information in this casual manner will invoke the penal provisions of Section 20 of the Act,” the Central Information Commission (CIC) said in its order dated 9 January 2009.
 
Aligarh-based Shema, on 6 July 2008 sought certain details about number of persons who had applied for certain inspection of exam answer papers. 
 
She sought information on following queries:
“1 How many persons applied for photocopies of OMR sheets or for the inspection of OMR sheets of any candidate appeared in any of the competitive admission tests organized by AMU, in 2008. Kindly let me know the dates of receipts of their application and names of examination, saving the names of applicants or the names of the candidates of roll nos.
2- How many persons applied for photocopies of question booklets or for the inspection of question booklet of any candidate appeared in any of the competitive admission tests organized by AMU, in 2008. Kindly let me know the dates of receipts of their applications and names of examination saving the names of applicants or the names of candidates or roll numbers.
3- How many persons applied for photocopies of answer keys or for the inspection of Answer Keys of question booklets given to any candidate appeared in any of the competitive admission tests organized by AMU, in 2008. Kindly let me know the dates of receipt of their applications saving the names of applicants or the names of candidates or roll numbers.”
 
The PIO however denied the information saying that "the desired information relates to the third party, as per section 11(1) of RTI Act, 2005, and therefore cannot be provided.”
 
Ms Shema then approached the First Appellate Authority (FAA). While rejecting her application, the FAA said, “Since the information sought by you does not help the office in its day-to-day functioning therefore it would put unnecessary burden on the resources. The request is rejected under Section 7(9) of the RTI Act, 2005. However, the information seeker being a resident within 1 km of this office can visit the section under prior intimation on any working day during office hours to go through the records herself. With the above observations, the appeal is disposed off”.
 
Not satisfied with the reply, she then approached the Commission. After hearing both the sides, Mr Gandhi, pointed out that denial of information on the basis of Section 11 and Section 7 (9) of the Act was without any basis in law and denial of information can only be under Section 8 (1) or Section 9.
 
“Section 11 sets out a procedure for giving the opportunity to a third party to give his objections and Section 7 (9) can be invoked only to state that information in the format demanded by the appellant is not possible. However the PIO would have to offer the information in an alternate format when invoking Section 7(9). Besides the queries do not lend themselves at all to using Section 11 or Section 7 (9),” the Commission said in its order issued on 9 January 2009.
 
CENTRAL INFORMATION COMMISSION
 
Decision No. CIC/OK/A/2008/01256/SG/0937
 
Appeal No. CIC/OK/A/2008/01256
 
 
Appellant                                                        : Mrs Shema
                                                                                  Aligarh - 202002
 
Respondent 1.                                               : Wajid Ali
                                                                                  CPIO
                                                                                  Aligarh Muslim University (AMU)
                                                                                  O/o the Controller of Examination
                                                                                  Admission Section, AMU, Aligarh 
 

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CBI probe against Mulayam, his son to continue in DA case: SC

The apex court dropped the CBI probe against Dimple Yadav, wife of Akhilesh Yadav, saying that she was not holding any public office and she was only a private person holding no position

New Delhi: The Supreme Court on Thursday directed the Central Bureau of Investigation (CBI) to go ahead with the probe against Samajwadi Party chief Mulayam Singh Yadav and his son and Uttar Pradesh Chief Minister Akhilesh Yadav in a disproportionate assets (DA) case, reports PTI.

 

However, the apex court dropped the CBI probe against Dimple Yadav, daughter-in-law of Mulayam and wife of Akhilesh Yadav, saying that she was not holding any public office and she was only a private person holding no position.

 

A bench comprising Chief Justice Altamas Kabir and Justice HL Dattu also modified its 1 March 2007 order and ordered CBI to file the status report before the apex court and not to the government.

 

"We are modifying our order of 1 March 2007 to remove the error in it directing CBI to place the report before the government," the bench said, making it clear that the agency will have to place the probe report before the apex court.

 

The bench said, "Since CBI is an independent body", there is no obligation for it to file the status report before the government.

 

The bench said it is also not contemplated in the Delhi Police Establishment Act under which CBI functions that the agency has to file its status report to the government.

 

"CBI, which is probing the case, has to decide what steps it has to take," it said.

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COMMENTS

Vaibhav Dhoka

4 years ago

It is said that CBI's services are used to haunt detractors in opposition.But a common man fails to understand How Judiciary falls prey to these STUNTS.

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