The Glitter Goes Away from Gold Schemes

What should you do with your monthly gold scheme with Jewellers

A bad news for my Gruhinis who love to splurge on gold and diamond! 

The golden goose (alias Tanishq Golden Harvest Scheme and Swarna Nidhi Scheme) is not going to lay golden eggs for you anymore.

In a public notice issued by Titan Company Limited (owner of the Tanishq jewellery brand), the scheme along with Swarna Nidhi is being closed and the company will refund your installments in the following manner.

>You show up on at any store starting from July 18 till August 31.

> You carry the original pass book and an identity proof, without which you will have to return home without your grihlakshmi! 

> You have the option of buying the jewellery with the accumulated amount or you can get the refund by cheque.

> 11+1= may not equal to 12. According to some reports,  the company has said that it will not make the 12th contribution.  As of now this is the only information shared by the company. So wait till July 18 to know how much will you get back.

So Why is Tanishq Closing the popular Scheme? 

The laws of the land have changed. As this article points out , companies have to follow certain conditions. Companies (if your jeweller is registered as a private company or a public company) cannot offer more than 12% return for deposits of more than 365 days, the deposit scheme has to be rated and company has to buy an insurance to ensure that the deposits of public are secured .There are many other conditions.

The Golden Harvest Scheme and other such schemes of jewellers whereby they asked you to make monthly deposits (if there are registered as a private company) fall under the purview of “deposits”. Therefore its not only Tanishq but the jewellery companies have to close the existing schemes by returning the deposit amount.

Being a company listed on stock exchange, Tanishq has issued a public notice about it. So if you are enrolled with any other jeweller in a monthly installment, you should check the status of the scheme at the earliest. 

The Great Gruhini Tip: Ask tough questions to your jeweller “Is your company partnership or a private company”,  “Are you aware of new rules on deposit schemes”. This will help you understand if his deposit scheme is legal or not.

If Jewellers come out with another lucrative offer for your accumulated amount? 

If you don’t really like the jewellery collection of the jeweller, take your money back.  If your intention was to keep aside smaller amounts so that you can make a big ticket purchase, then why not stash away that money in a recurring deposit (6 months-5 year period) with your bank. It might earn you 7-8% interest .  On maturity, use that amount to buy jewellery from any store or buy gold coins as a future investment. If paying a tax on interest pinches you then why not stash it in the old fashioned way: the kitchen jars so that you don’t end up spending it here and there. You will be free to purchase jewellery from any place.

What should you do if Jewellers come out with a new investing scheme?

Jewellers will come out with schemes to circumvent the new rules.  Some of them have started offering a 10 month plan whereby you pay for 10 months and the jeweller contributes the 11th month installment.  As this article points out, some of them will offer to exchange your old gold with new gold also.

In the existing schemes like the golden harvest scheme, some of my friends realised that they had to buy jewellery from the same jeweller  even if they didn’t like what they had on offer. Moreover, there may not be the option to buy gold coins which can be used at a later date. So your options may get limited and if the gold prices rise, then you will end up giving more from your pocket even after paying installments.

The Great Gruhini Tip: Stay away from such schemes as they do look lucrative due to discounts offered but you can earn better returns by parking the money elsewhere, earn more returns than the discount offered by the jeweller and ultimately buy something which will make you glitter without giving a hole in your pocket!


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