Gold Accumulation Plan

Gold Accumulation Plan

What is the Gold Accumulation Plan?

A gold accumulation plan is a scheme that allows you to invest in gold through regular monthly instalments. It enables you to accumulate physical gold over the tenure of the scheme ranging from 1 year to 15 years, with the minimum monthly subscription being as low as Rs. 1,000 per month.

How does it work?

  • Method:
    The scheme uses a daily average pricing methodology that splits the monthly subscription into equal parts and allots the purchaser the equivalent of gold grams bought over 20 successive business days. The accumulation of gold starts on the day after the funds have been credited, and the scheme provides a unique Customer ID to help you see the statement on a daily basis and monthly basis, which will display the amount of gold accumulated and the corresponding purchase price. This makes investing in gold both transparent and simple.
  • Security:
    Gold accumulation schemes are fully backed by physical gold, which is stored with a vaulting agency. To ensure further transparency and give investors a sense of security, this physical gold is controlled by an independent trustee.
  • Tenure & Fees:
    Tenures for the scheme currently range from a minimum of 1 year to a maximum of 15 years. The minimum investible amount is Rs. 1,000 per month. Each subscription attracts an administrative charge of 1.5% added to the daily gold price. Gold grams rounded down to 4 decimal points are credited to the account.

Is it for me?

The Gold Accumulation Plan allows a lot of flexibility and long term benefit, some of which are listed below:


  • Disciplined gold accumulation: For those who find it difficult to save gold or make a big purchase at once, this becomes a disciplined accumulation technique under which you can accumulate gold grams by making small but regular subscriptions.
  • Cost averaging methodology: If you are not a seasoned investor you will not be watching the market on a daily basis. All subscriptions made will be split into 20 daily purchases thus reducing the risk of timing the markets. More gold grams will be credited during falling markets and less during rising markets.
  • Planning for special events: With the help of a Gold Accumulation Plan you can factor for a large gold purchase in the future for special events like a wedding, anniversary, birthday or a new addition to the family.
  • Zero default risk: There are stringent RBI specifications ensuring appointment of an independent trustee to manage the bank accounts in which customer funds are deposited, assuring safekeeping of gold by an agency that has insured vaults and guaranteeing delivery of gold to the end customers. This helps create a Zero Default risk structure for you as an investor.
  • Assured purity: In today’s day and age, purity of gold matters. Through this plan, 24 Karat gold of 995 fineness or more is credited to the customer’s account up to 4 decimals.
  • Flexibility: As an investor you can choose to redeem your accumulated gold grams in various physical forms like coins and/or bars or jewellery across multiple outlets as outlined by the Non Banking Finance Company.

How do I redeem it?

On maturity, using your unique Customer ID, you can generate a maturity advice that will tell you the number of grams accumulated. You will also know of any payments due to round off the grammage to the nearest 0.5 grams, and payments towards making charges, delivery charges and any other taxes and levies as applicable. Once you have specified the form in which you want your gold redeemed (coins or jewellery) and have made all payments due, you can then either go to any of the local fulfilment centres to redeem your gold or opt for home delivery as offered by few corporate companies.

Where to buy?
Few Corporate companies and NBFC’s (Non Banking Finance Companies) are selling this particular scheme.


Gold Glossary

Market risk

Refers to the risk of the gold prices dropping due to changes in economic variants. However, in India, this risk is the least in terms of gold, since gold prices have generally shown a rising trend.

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