Gold Jewelry Investment has now took a different turn, where you can invest in the metal through the Gold Jewelry Scheme. Know About this scheme in detail, here in this article.
Gold is a precious metal of high value. Despite its nature in the trade market, gold widely attracts the fashion industry, including jewelry.
Most of the population invests in gold jewelry for various purposes, including tradition and source of haven.
While the majority of people buy gold for occasions, the rest of the time, it remains idle and insecure at home. To mobilize gold and to reduce imports, the government encourages gold jewelry investment.
Gold jewelry investment includes different schemes with benefits that range up to the needs and demands of investors. One such gold jewelry investment is the purchase scheme.
Gold Jewelry Purchase Scheme
While an individual owns jewelry, gaining benefits from it includes smart investment.
But, people also have an option for choosing a gold purchase scheme that allows making a planned purchase of gold jewelry for different occasions.
Under this scheme, individuals pay a fixed amount every month for a tenure of eleven months.
Individuals are eligible for a special discount from the jeweler at the end of the eleventh month for buying the gold jewelry.
Generally, jewelers provide these schemes to their customers, and in return, buyers get customized jewelry.
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How does the Gold Jewelry Purchase Scheme work?
As mentioned above, buyers have a choice of planning their gold purchase using this scheme. They can opt for different periods depending on the occasion and likewise buy gold when necessary.
For a 12 month scheme, individuals pay for 11 months where the jeweler either adds the last month installment amount or provides that discount of that amount.
According to the amount deposited per month, in the end, they can buy custom gold jewelry worth the total amount.
The minimum installment amount depends on the jeweler but most commonly ranges in between 1,000 INR to 2,000 INR per month.
The first amount of deposit is subject to increase depending on the multiples and period of investment. The weight of gold at the end of tenure depends on its value at the time of redemption.
Some jewelers impose a strict policy and do not allow investors to change the scheme or installment amount after the first installment.
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Different Tenures Available for Gold Jewelry Investment
Jewelers provide different periods of investment in the gold jewelry purchase scheme.
The schemes run for periods of 6, 12, or 15 months allowing investors to redeem gold one month after completion of the scheme in the form of jewelry from the same retail store.
The Purity of Gold in Gold Jewelry Purchase Scheme
Under this scheme, the gold is either 18 karat or 22 karats. Investors must ensure that the gold contains a hallmark by the Bureau of Indian Standards.
While investing from a local retailer or jeweler, the investors must check the hallmark and purity of the gold.
Enrollment Process for Gold Jewelry Purchase Scheme
Investors can fill a pre-printed application form to invest in a gold jewelry scheme. This form is available at jewelry stores, and investors need to provide identification proof along with it.
After the application is approved, investors have to pay the first installment at the store using cash or card, and the subsequent installments are available to pay through cheques or by making a direct debit from a bank account.
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Why Choose Gold Jewelry Purchase Scheme
Gaining profit from deposited gold and earning a higher quantity of gold by the end of a year is the preferable option for investors.
Similar to monetization, the purpose of the gold jewelry purchase scheme is to mobilize the gold, making it available from banks on loans, reducing dependence on imported gold, and converse foreign exchange.
Benefits of Gold Jewelry Purchase Scheme
- Planned jewelry investment allows advance buying options through monthly deposits and gets them at a discounted price.
- A customized scheme allows investors to plan for special events.
- The amount of gold the investors receive during redemption depends on the value of gold on the date. Therefore, the hiking prices of gold act as a benefit here.
- It enables monthly deposit that reduces the budget load on investors. That is, the deposit money monthly is more affordable than the lump-sum investment required to buy gold.
- Some jewelers also offer a discount on making charges, so investors don’t need to pay extra for the same.
On completion of the tenure, investors can buy 18 or 22 karat gold from the deposit money from the retailer. Some jewelers don’t allow to buy gold coins or bars using the deposit money, but it depends on the retailer.
When the billing amount exceeds the eligible amount, investors need to pay an additional value to take the delivery of jewelry.
But, this purchase should be from the same jeweler or retail store. Sometimes, extra GST is applicable at the time of jewelry redemption. The investors should also remember that the deposit cash is not refundable.
Retailers Providing Gold Jewelry Scheme
Some branded companies provide the facility of gold jewelry schemes to their customers.
Although these regulate under the government, some have their terms and conditions. During the application itself, investors have agreed to these policies to get complete benefits.
Some famous retailers include Tanishq’s Golden Harvest Scheme, Jos Alukka’s Easy Buy Gold Purchase Plan, Malabar Gold & Diamonds Smart Buy Scheme, Prince Jewel Plus, GRT Golden Eleven Flexi Plan, so on.
These initiate the gold jewelry investment that provides mobility to gold. Furthermore, retailers strongly depend on the gold weight and gold value of the investment. That is, investors have the option to choose between either type of investment.
In the gold value option, investors have to pay a fixed amount every month, and as per the rate of gold on that date, it will get credited to their GRT account. Whereas in the gold weight investment, investors purchase gold as per the price on a monthly basis.
Investors can choose to buy 1 gm, 2 gm, or 5 gm of gold according to their convenience. They can then use the collected gold at the end of the eleventh month under both options.
Apart from the mentioned benefits, retailers also incur the making charges in the gold jewelry investment.
Thereby saving the amount for the same that leads to choosing an outdated design. The investors can choose the latest design and get their piece of planned jewelry made in that.
Conclusion – Gold Jewelry Investment
Gold investment is possible in various ways. While other schemes like monetization exist, gold jewelry investment regulates the provision of planning the purchase of gold.
It is useful for people with budget constraints and can therefore invest monthly deposits that, at the end of the tenure, are redeemed in the form of gold.
When the period of investment ends, investors can buy gold that is equal to the sum of deposits in the tenure.
Moreover, jewelers or retailers pay in the last month or alternatively provide a discount on the gold. Smart investors can easily depend on the predictions and accordingly invest in the gold jewelry scheme.
That is, the deposit amount and the weight of gold in return can be profitable if individuals with stock market knowledge invest in gold jewelry.
Knowing that the financial market is ever-changing, investors can benefit themselves from this scheme by evaluating previous performance in the tenure.
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