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.



PC Jewellers

Tribhovandas Bhimji Zaveri

Gitanjali group

Gitanjali Jewels


GRT jewellers

Scheme name

Jewels for less




Golden Harvest

Gold Tree

Your instalments in months


12, 15, 18, 24

11, 21, 30




Jeweller’s bonus instalment in months


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 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 -

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