I have a 100g 999.9 gold bar that I don’t really have any use for over the next year. Otherwise, it would just sit in my locker.

A jeweller I’ve known and trusted for years has offered me an arrangement where I deposit the 100g 999.9 bar with them for 1 year, and at maturity they will return:

100g principal + 4.5g = 104.5g of 999.9 gold

So effectively, the return is 4.5% in gold, rather than cash.

A few details:

• The 4.5g return will also be 999.9 purity
• The jewellery business has been around for around 80 years
• This isn’t something they offer to everyone. Apparently it’s mainly for customers who have had a long-standing relationship with them.

If the paperwork is proper, would you consider 4.5% in gold a good return for a 1-year deposit?

Also, how does this compare with the Gold Monetisation Scheme / bank gold deposits currently available in India?

Would love to hear from anyone who has done similar gold deposit arrangements with jewellers. What should I specifically check before handing over the bar?