Smart ways to invest and attain early financial freedom

This is a short note on the ROI that one gets when you invest through the gold saving schemes offered by jewellers.


The scheme works as follows:

·       You pay 11 monthly instalments of any amount in multiples of Rs 500

·       The jeweller pays the 12th instalment

·       You can redeem the total amount (12 instalments) and take a jewel for the amount.


What is not visible is the price of gold at which the sale will happen?

It is the price that is prevailing on the day of redemption (12 months into the future).

As the price of gold is expected to go up in India as long as India is a developing country, you do not get any advantage of this increase in gold prices  (for more details, please see my book where I have shared how to predict gold prices in future).

Plus you do not get any interest on the money deposited by you for the 11 months.

So is it a good ROI or a bad ROI?
You decide.

Author Description

S. G. Raja Sekharan

S. G. Raja Sekharan is a visiting MBA faculty, a mentor to budding entreprenuers, a wealth management consultant, an author of a book on Investing in India and the author of this blog.

Loading Facebook Comments ...

4 thoughts on “Investing in gold through gold saving schemes offered by jewellers

  1. Adding to your point sir investment in gold for a couple of years from now wont be able to beat food inflation due to following reasons
    lower oil prices
    rally in global market and political stability.
    gold being at its peak will lower it demands
    Government bringing loan amount given on gold to 60%
    Import duty on gold likely to be increased
    Hence conclusion is that gold will not give more than 9.5% return over next year .
    Source : bloomberg

  2. Sir. I have a doubt. I have actually seen the rate card of a jewellery shop where someone I know makes these payments…I have seen them locking in the price of Gold as of the day the payment was made…which led me to believe that apart from the extra 1 month installment we also get to lock in to the price as of historical prices and the redemption is made as of the number of grams accumulated…Is my understanding correct? please correct me if I’m wrong…

  3. Syed – the scheme that I have described is the gold scheme offered by Tanishq – I am sure there will be variants to this scheme and what you are mentioning is a variant that is better from the customer’s point of view.

Leave a Reply

Your email address will not be published. Required fields are marked *