Diwali 2026: Planning to invest in gold savings schemes by jewellers? How they work, benefits, risks and what to check
Many jewellers in India offer gold saving schemes to encourage customers to save towards purchasing gold jewellery. These schemes become particularly relevant during the festive season, especially around Dhanteras and Diwali, when making new purchases such as gold and silver items are considered auspicious and is traditionally associated with prosperity and good fortune.
A jeweller gold savings scheme is a structured purchase plan in which you deposit a fixed amount every month for a set tenure. At maturity, you can use the accumulated funds, along with scheme benefits, to buy jewellery.
The scheme benefits typically include a discount on making charges or a bonus added at the time of redemption. Unlike other investment products, like bank deposits, these schemes do not offer interest on your deposits.
How these schemes work
Gold savings schemes follow an instalment-based structure, allowing you to set aside a fixed amount every month towards a future jewellery purchase. While the exact terms vary across jewellers, most plans follow a similar process:
— Enrol with a jeweller: Sign up for a scheme offered by a participating jeweller and choose your monthly instalment and tenure.
— Pay monthly instalments: Deposit the agreed amount every month, typically for 10 or 11 months, depending on the scheme.
— Redeem at maturity: Use your final deposit to purchase jewellery and avail of the scheme benefit, which may include a bonus instalment, a discount on making charges or other value additions.
— Check the terms and conditions: Rules on missed instalments, grace periods, premature closure, redemption deadlines and eligible jewellery vary by jeweller. You must always check these details before considering the scheme.
For example, let’s say you enrol in a gold savings scheme with a monthly instalment of ₹5,000 and a tenure of 10 months. In this case, you would deposit ₹5,000 every month for 10 months, taking your total contribution to ₹50,000. The jeweller may then offer the 11th instalment of ₹5,000 free, allowing you to purchase jewellery worth ₹55,000 during the redemption period.
The biggest benefit of this scheme is that you may receive a jewellery item worth more money than you contributed. However, the benefits offered on a gold savings scheme may not be the same for every jeweller.
Risks and safety checklist
Though the scheme may appear attractive on the surface, there are certain limitations that a person must remember before enrolling to it. Here are some risks outlined in a blog post by Rupeezy:
— No interest earned: Gold savings schemes are purchase plans, not bank deposits or investment products. Therefore, your monthly contributions do not earn any sort of interest.
— No cash redemptions: Scheme benefits can generally be redeemed only against jewellery purchases. Cash refunds are usually not allowed.
— Discounts may be capped: Benefits may be subject to limits on making-charge discounts, value additions or the jewellery collections eligible for redemption.
A major safety precaution that one should compulsorily take is to preserve all payment receipts, enrolment documents and maturity certificates as proof of your contributions and eligibility for scheme benefits.
Are there any taxes when you redeem?
Yes. GST is applicable when you purchase jewellery using the scheme’s amount. It is charged on the transaction value, including the gold value and making charges, at the time of billing at the respective jeweller.
While scheme benefits such as discounts on making charges or bonus instalments may reduce the effective purchase cost, they do not exempt the transaction from applicable goods and services tax (GST).
