November 22, 2012

Reliance My Gold Plan-Review

Now one more plan added to the list of gold schemes where you have only option of redeeming  physical gold but luring people as if the gold investment. This time it is from Reliance Money Precious Metals Private Limited (RMPM)  and the name of scheme is “Reliance My Gold Plan” Let us look at it’s features and to whom it is beneficial.

World Gold Council is the marketing associate of this plan. It will assist RMPM in marketing and promoting the product. RMPM is the separate entity of Reliance Money. RMPM is the part of Reliance Anil Dhirubhai Ambani Group.

Plan features:-

1) Minimum monthly subscription Rs.1,000 and in multiples of Rs.500.

2) Resident Individuals including minors, HUF and NRIs can invest in this plan.

3) Scheme tenure will be 12/24/36/48/60 months.

4) Lock in period will be 6 month from the initial subscription. Now no premature termination fee on fulfilling your accumulated gold grams post 1 year. Post lock in, pay the residual amount for a cumulative subscription of on year without any charges.

5) Charges-administrative charge 1.5%, pre-termination charge-2.5% of accumulated amount and safe keeping charges 0.5% per annum on the total subscription amount.

6) Delivery will be in terms of gold coins ranging from 0.5/1/5/8/10/20/50 grams or in the forms of jewellery.

7) In case of any unforeseen event, you can liquidate part of your accumulation. Subject to minimum fulfillment of 5 grams, you can make partial fulfillment and continue the plan.

8) Purity of gold is 24 Karat Gold of 995 fineness. Such Purity has only been achieved by the refiners based in Switzerland. Fineness is the measure of the purity of the metal that was used to make the coin. It is usually expressed as parts per 1000. Percent Purity is the measure of the purity of the metal which is expressed in Percent terms i.e. parts per 100.

Gold Purity is usually measured in Karats ranging from 18 Karat to 24 Karat. In terms of Purity 18 Karat translates to 75% purity and in terms of fineness it translates to 750 fineness.
The relation between Karat and Fineness is described below:
1 Karat = 1000/24 Fineness. So, 1 Karat represents 41.6 Fineness.
Hence 24 Karat represents anything between 958 Fineness and 1000 Fineness.
So, a Gold Coin with 960 parts of Pure Gold and balance 40 parts of Copper is also 24 Karat Gold and a Gold Coin with 980 parts of Pure Gold and balance 20 parts of Silver is also 24 Karat.

9) Daily Averaging-Each subscription amount received from the customer is divided into 20 equal Daily Purchase Amounts and Gold Grams up to 4 decimals are allotted by dividing each Daily Purchase Amount by the Gold Price (inclusive of Administrative Charges) on each business day. By allotting grams on the basis of Daily Averaging the price volatility of Gold is minimized thereby insulating the customer from the price volatility.

10) Making Charges-Making charges are as below.

11) You cant hold this account in a Joint Account and you can’t increase the amount in between the scheme tenure.

12) Nomination is mandatory to this scheme. You can change nominee afterwards also.

Review:-As I told in the first line of this post itself, this scheme is mainly meant for purchaser of gold but not for gold investors. Reason is, your redemption will be in the form of physical gold but not in the form like ETF, E-Gold or Gold Mutual Funds. Especially when you redeem in the form of jewellery then your invested money value will again decrease in the form of making charges and wastage.

Pricing will be high compare to E-Gold or MCX. Reason they are stating is, MCX is totally a future market hence not fair to compare with MCX price. But when it comes to E-Gold of NSEL, they stating that price will not include landing price. So you need to fetch more than the actual gold price available in E-Gold or MCX.

In one way government have a concern over gold investment and recently RBI too banned all loans which promote gold investments but these schemes are attracting retail investors to invest in gold. Strange to say that regulators are not eyeing on such schemes.  Reason is, this product is neither a collective investment pool like mutual funds nor a Deposit. Hence it will not come under either RBI or SEBI. So this product is totally out of any regulator purview. Hence you need to believe on the company and need to invest. This may seen as a bit risky for few people.

This plan using the way of investment which I say as “SIP in SIP”, means you are paying your monthly contributions as a monthly SIP but in this plan, this monthly contribution again will be divided into 20 market days of a month and will be purchased accordingly. Hence in your monthly SIP again cost averaging will effect with dividing of 20. This is the only unique way I found in this scheme.

This scheme looks like concentrating on retail investors who can easily afford by subscribing with as less as monthly Rs.1,000. But to make you caution, this scheme not called as an investment instead you may say that easy way accumulation of your physical gold need. Hence it is a big no from my end if you are thinking of gold investment.

 

21 Comments

  1. Anyone who needs to know the negatives of the scheme. Please go through this blog, quite well explained.

    http://capitalmind.in/2014/04/the-negatives-of-the-reliance-my-gold-plan/

    And anyways this is not an investment instrument, its just to save the gold, which I think we won’t be doing in the way these guys are doing.
    I was thinking of to start this, but as other guys mentioned, they are having problems with customer care itself. No, I am having second thoughts on this.

    Very helpful blog basu, and even the comments.
    Thanks guys,
    Help each other like this. 🙂

    Reply
    • This is not only a worth investment but also a worst investment , due to careless behaviour of their customer service and the people sitting in their CAMS office. I pers. adv to all Indians ” NOT TO INVEST IN RELIANCE”
      THEY ARE THE BIG CHEATER OF THE ORDINARY PEOPLE.

      Reply
  2. Hi Basu,

    Please let me know what is the best way to buy gold?I may need nearly 120gms of gold for my sister’s marriage in the next 2-3 years. Is it better to buy physical gold at the required time?or is it wise to start investing in Gold ETFs now and buy it at the time I need?

    Thanks

    Reply
    • Sai-If your goal is just 2 years away from now then your question does not matter whether the time is good or not. Better you start accumulating through ETF. At the time of actual ornaments then you can redeem and convert that into ornaments.

      Reply
      • Hi Basu,

        Thanks for the reply!
        In that case, please let me know how to invest in gold ETFs?
        Also, out of the many available ETFs(ICICI,Reliance,SBI etc), which is the best one to buy gold ETFs?

        Thanks

        Reply
        • Sai-You need to have Demat Account to invest in ETF. There is no such difference among Gold ETF. Because anyhow underlying asset is same. So you can choose any of your choice.

          Reply
  3. It is totally FAKE.. I took the plan and given one cheque. Cheque has been cleared and after that two payments have been debited from Account by ECS.. They are saying that they have not received any payment and asked me to give the ECS mandate.. and bank is saying that amount is credited to RMG (Reliance My Gold Plan)… So it is a big fraud and fake. My Customer ID = 200268

    Reply
  4. this schema is bad schema .. no return value… More admin charges r paid by investor ..
    buying gold in higher value than market.. no such profit in this schema ,,, .. Investors r not fools…
    no value for the money in this schema

    Reply
    • Karthik-Thanks for sharing your views 🙂

      Reply
  5. hey salman ur no is not reachable….
    plz can u call me on this no 09870228809.
    i m the customer of Reliance my gold plan, but i was not charge last 3 month.

    Reply
  6. well.. I have purchased reliance my gold plan with 1000/month. However I observed that the rate mentioned in the statement is more than the actual market rate plus administrative charges will be included on everyday basis. which is actually a loss for us as in my plan everyday I buy gold for Rs. 50 however my admin charges is also Rs.50. ex.( on 5/6/2013 it shows daily sb. amount: Rs 50.00; gold gram rate: 2896.61; gold gram rate including admin charge: 2940.06; Gold gram allotted 0.0170). I do not think it is better way to invest on gold. per day if I am paying Rs 50 as admin charge then monthly I am losing Rs. 1000 as admin charge (20*50).

    Reply
    • Jai-Thanks for sharing your experience. These are the schemes where you not bother about value but invest to buy physical gold which includes lot of expenses. Hence in real term it is not called gold investment. Hope your comment will enlighten our Indian greedy investors of Gold 🙂

      Reply
  7. Hi, I am actually looking just for gold accumulation. What do you recommend?

    Reply
    • Shanawaz-Either go for Gold ETF or E-Gold of National Spot Exchange.

      Reply
  8. what if i m thinking about buying in physical form slowly. 1000 pm for 15 years

    Reply
    • Vivek-Physical form and waiting period 15 years is too long. Safe keeping is the biggest threat. Best choice is to accumulate by ways of Gold ETF, Gold Mutual Funds or E-Gold.

      Reply
    • give ur mobile number sir i ill call an explain u everything sir

      Reply
      • other wiseou
        u just give one mis call this no 7401347510 we r from reliance only sir
        if any enquiry of about that plz every body plz give one missed call or sms thanking y

        Reply
      • Salman-My contact details are available on “Contact us” page. Please use the same.

        Reply

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