Gold Savings Plans: How to Buy Gold Systematically
Most Indians buy gold in large quantities during festivals or weddings. But what if you could build your gold savings gradually, just like you save money in a recurring deposit? Gold savings plans allow you to do exactly that, making gold investing accessible, affordable, and systematic.
What Is a Gold Savings Plan?
A gold savings plan lets you invest a fixed amount of money in gold every month. Instead of buying 10 or 50 grams at once (which requires a large lump sum), you accumulate gold in small quantities over time. At the end of the plan, you can either take physical gold or the cash equivalent.
Think of it as a SIP (Systematic Investment Plan) but for gold instead of mutual funds.
Types of Gold Savings Plans Available in India
1. Jeweller Gold Savings Schemes
Many jewellers like Tanishq, Kalyan Jewellers, and Malabar Gold offer monthly deposit schemes. You pay a fixed amount every month for 11 months, and the jeweller adds a bonus amount (typically equal to one month’s instalment). You then use the total accumulated amount to buy jewellery from that store.
How it works: Pay Rs 5,000 per month for 11 months (Rs 55,000 total). The jeweller adds Rs 5,000 as a bonus. You now have Rs 60,000 to buy jewellery.
Pros: Bonus amount from jeweller, disciplined saving habit.
Cons: You must buy jewellery from that specific jeweller. Making charges still apply. If the jeweller goes bankrupt, you could lose your money.
2. Digital Gold SIP
Apps like Bachatt allow you to set up automatic monthly investments in 24K digital gold. Your money buys gold at the current market price, and the gold is stored in secure, insured vaults.
How it works: Set up a monthly investment of Rs 500 or more. Every month, gold is purchased at the prevailing rate and added to your digital gold balance.
Pros: Start with very small amounts, 24K pure gold, no making charges, flexible (pause or stop anytime), can sell anytime.
Cons: 3% GST on purchases, storage is handled by the platform provider.
3. Gold Mutual Fund SIP
You can set up a SIP in gold mutual funds that invest in Gold ETFs. This is a market-linked investment that tracks gold prices.
How it works: Set up a monthly SIP of Rs 500 or more in a gold fund. The fund buys Gold ETF units on your behalf.
Pros: No demat account needed, regulated by SEBI, easy to manage alongside other mutual fund SIPs.
Cons: Expense ratio (management fees) of 0.1-0.5%, cannot convert to physical gold directly.
4. Sovereign Gold Bond (SGB) Purchases
While SGBs are not available as a traditional SIP, the RBI issues new tranches periodically. You can plan to buy SGBs in each tranche to build your gold holdings over time.
Pros: Government backed, 2.5% annual interest, tax-free at maturity.
Cons: Not available continuously, 8-year lock-in, limited tranches per year.
Why Systematic Gold Investing Makes Sense
Just like equity SIPs benefit from rupee cost averaging, gold SIPs do the same:
- When gold prices are high: Your fixed amount buys less gold.
- When gold prices are low: Your fixed amount buys more gold.
- Over time: You get a favourable average cost per gram.
This eliminates the stress of timing the market. You do not need to predict whether gold prices will go up or down.
How Much Should You Invest in Gold Monthly?
Financial advisors typically recommend allocating 10-15% of your investment portfolio to gold. Here is a simple guideline:
- Monthly income Rs 20,000-50,000: Start with Rs 500-1,000 per month in gold
- Monthly income Rs 50,000-1,00,000: Consider Rs 2,000-5,000 per month
- Monthly income above Rs 1,00,000: Rs 5,000-10,000 per month
The key is consistency. Even Rs 500 per month adds up significantly over 5-10 years.
Jeweller Scheme vs Digital Gold: Which Is Better?
While jeweller schemes offer a bonus, digital gold wins on almost every other parameter. You get pure 24K gold without making charges, flexibility to sell anytime, and no risk of a jeweller defaulting. If your goal is investment (rather than buying jewellery for a specific occasion), digital gold or gold mutual funds are the smarter choice.
Start Your Gold SIP with Bachatt
Bachatt makes gold savings effortless. Set up a monthly gold SIP in under 2 minutes, starting from just Rs 10. Your gold is 24K pure, securely stored, and fully insured. Track your gold balance in real-time, and withdraw or sell whenever you need. Build your gold wealth one month at a time. Download Bachatt today.
