Should gold lovers invest in GRT Flexi Gold Plan?
Last week, GRT Jewelers has announced new GRT Gold Saving Scheme called GRT Flexi Gold Plan as a unique gold plan. There are several jewellers like Tanish, PC Jewellers, Gitanjali Jewellers who has been coming up with several gold saving schemes to attract customers. Does this GRT Flexi Gold Plan good for gold lovers? What are the unique features of GRT Flexi Gold Plan?
Features of GRT Flexi Gold Plan
Your monthly payment will be captured on the basis of weight of gold price on the date of payment or your monthly investment.
- You can invest for minimum of Rs 1,000 or multiples of Rs 1,000 there-of. Your monthly investment is fixed. You can make payment through cheque/DD/ECS or post dated cheques. You can pay the installment at any of the GRT showrooms.
- The period of the scheme is 15 months.
- Delay in payment would delay your redemption and it would not cancel your investment scheme.
- Monthly investments cannot be paid in advance.
- If you want to discontinue within 12 months from date of joining, you can buy jewellery with the amount you have invested. You would not get any benefits of this scheme. If you want to discontinue after 12 months but before 15 months of the scheme, you can buy jewellery with the accumulated gold with no benefits. No cash refund would be given.
- You can buy plain gold jewellery or 22k/24k gold coins can be purchased. In case you buy gold jewellery exceeding the accumulated weight, value addition (wastage) will be charged on excess weight. If the Value addition (Wastage) exceeds 18%, only difference needs to be paid. If the Value addition (Wastage) is below 18%, you would not get any differential value as return. See the below charts on how this option works.
GRT Flexi Gold Plan options
GRT Flexi gold plan is available in two options.
a) Gold Weight Based Plan: Redemption based on accumulated gold based on the monthly payments. When you buy jewellery on maturity, there would not be any wastage up to 18% on accumulated weight + No VAT.
How gold weight based plan work?
b) Gold value based plan: Monthly installments would be accumulated and further benefits like cash/Gift incentive + one month bonus would be added on maturity. You can buy jewellery on 16th month with total investment + one month bonus amount. On maturity if you buy gold jewellery, there would not be any making charges, however wastage would be charged and you can choose special gift incentive from many options at the end of the 15th month.
How gold value based plan works?
Is GRT Flexi Gold Plan is really a good gold saving plan?
1) Gold Weight Based plan is good: Let us assume that instead of investing in Gold weight based plan, you invest them in Gold ETF’s or any other Gold Mutual funds. By the end of the tenure, since all these options track the underlying gold, you would not see much difference in the accumulated gold value. However the catch is if you sell Gold ETF or Gold mutual funds at the end of 15 months and buy gold jewels, the wastage would still be removed by all jewellers. If you invest in GRT Gold Weight based plan, you can save money to that extent.
2) Gold value based plan-not so good: Let us assume that instead of investing in GRT-Value based, you invest in Gold ETF or Gold mutual funds. GRT value based gold plan is like any other money saving plan, but the end of the period, instead of interest, they would pay you gift incentive of Rs 400 per Rs 1,000 investment and one month bonus would be added. Means if you take an installment of Rs 1,000 per month, you would get Rs 1,000 x15 months + Rs 400 + Rs 1,000 as bonus which totals to RS 16,400. However if you invest Rs 1,000 in Gold ETF or Gold MF’s, it would track only gold value and would not get any interest. The gold value can come down or increase in next 15 months. Hence, if your objective is to buy gold jewel, you should opt for Gold ETF or Gold Mutual funds and NOT value based GRT gold plan.
Conclusion: Thought there are several other gold saving schemes, each of them have their unique features. If you are really a gold lover and want to buy gold jewellery in next 15 months, opt for GRT gold weight based plan to benefit more.
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Should gold lovers consider GRT Flexi Gold Plan