On the other hand, the gold plan launched by Reliance Money Precious Metals Pvt Ltd, a Reliance Capital company, in tie-up with the World Gold Council (WGC), accumulates physical gold using a daily average pricing methodology.
It splits the monthly investment into equal parts and allots gold grams over 20 successive working days.
Amresh Acharya, director-investments at World Gold Council, says, "This works as a mutual fund SIP (systematic investment plan) where the customer gets the statement of holding on a daily basis, detailing the amount of gold accumulated and the purchase price."
The minimum investible amount is Rs 1000 and one can stay invested up to 15 years.
However, the company levies a 1.5 per cent charge on monthly subscription.
For instance, if your monthly investment is Rs 5000, then Rs 4925 only gets invested, while Rs 75 goes towards storage and other administrative costs.
Second, a 2.5 per cent pre-maturity charge is levied if the plan is withdrawn within six months.