Gold Scheme Offers Free Month? Read This First

Jewellers offer gold savings schemes promising one free month of gold. But GST at 3% plus making charges up to 25% mean your 'free' gold often costs far more than buying gold outright. Here's how to check.

Here's what happened: Jewellers across India run monthly gold savings schemes promising one free month of gold if you deposit a fixed amount each month for 11 months.. Every gold purchase attracts 3% GST, plus jewellery-specific making charges ranging from 5% to 25% or more, which significantly inflate the actual cost of redemption.. The 'free' month bonus is usually disbursed as jewellery or store credit — not as bar gold — meaning making charges are embedded and unavoidable..

What you should do: Calculate the full cost: multiply your total deposits by 1.03 (GST) and then add the jeweller's making charge percentage before comparing to buying gold directly.. Ask the jeweller in writing what the making charge percentage is and whether it is fixed or variable before signing up for any monthly scheme.. Compare the scheme against a Sovereign Gold Bond (SGB) or a gold ETF — both give you market-linked gold exposure without making charges or high GST on jewellery conversion..

Sovereign Gold Bonds pay you 2.5% annual interest on top of gold price gains — no making charges, no jewellery GST trap, and full market-price exit at maturity.

For readers weighing their credit and loan options, our personal loan guide and CIBIL score resources put this update in context.