On the last leg of my daughter Tanya’s vacation, we went for a brief stay to my cousin’s house in Navi Mumbai as our daughters are of same age and bond famously. It was the last day of stay, and my sister –in-law Vandita asked me whether I would like to visit a new big jewellery store opened recently in the vicinity. I readily agreed as I did not want to miss the opportunity of catching up with latest in gold and diamond jewellery, excitement was even more because my favourite star was their brand ambassador. On the way she told me that she has opted for Gold Saving Scheme of leading jewellery brand where she deposits fixed sum for 11 month and after completion of 12 months she buys a gold jewellery piece which becomes a gift for her daughter Aarushi’s birthday. Now she was going to check if any such scheme existed with the new store so she could start one more gold scheme. I was really impressed, what a gift for teenage daughter?Saving bhi, gifting bhi, asset building bhi!

It was only after talking to Manager of that store and shooting some questions at him, I was reminded of why I should never judge a scheme with all its dazzling glittering cover. As my curiosity in the matter grew, so did my research. I realized, there were many stores running these schemes but schemes were more or less similar barring one exception of a north based leading jeweler who took 10 installments and gave jewellery of 12 months value implying added two installments from his side. Now my belief firmed. On a telephonic inquiry, I was provided with this special bonus table and I was like wow! Let me share it with you.

Monthly Payments Total in 12 months Jewellery Worth

1,000 12,000 14,000

2,000 24,000 28,000

3,000 36,000 42,000

4,000 48,000 56,000

5,000 60,000 70,000

Again something did not seem right, it was too good to be true!

So obviously I dug deeper into the matter. Obviously, there had to be a catch. Afterall, this was business promotion tactics for the jewellery brands and retailers as it would created an sale of jewellery every month. This is a means of getting customers (mostly ladies) involved in this scheme, their future sales are on track. Jewelers know that most of the times customer especially ladies exceed their budgets in jewelry purchase. Hence after completion of 11 months they tend to buy jewelry of a higher amount than they had initially invested. According to jewelers, the last installment is the bonus which you earn when you buy jewellery at the end of the term. One jeweler even compared it to a recurring deposit scheme of the banks. But he did not find it important to mention the major differentiating factor is that you cannot get your money accumulated back at the end of the term. In these Gold savings schemes you have to buy the gold jewellery only (Aha! The catch!) not bars or coins.

Why the insistence on jewelry? Making charges, of course!

There are very few designs on offer which come with the tag “Zero Making Charges” and if you don’t like any of those designs then you end up paying heavy making charges for the choice you’ve made. This way making charges will offset the returns which you have made on the scheme.

Auspicious days for buying gold in India