My Tanishq Golden Harvest plan has matured, and I have over a lakh rupees in it. I don’t have any immediate need for new jewellery. Is it still a smart financial move to buy something I don’t need, just so I don’t lose the bonus?
No, from a purely financial perspective, it is generally not a smart decision to make a large, unplanned purchase of a luxury item like jewellery just to realize a relatively small discount or bonus. This often leads to a greater overall financial loss due to the non-recoverable making charges.
The Problem of a ‘Forced Purchase’
My financial advisor explained this concept to me using a clear example. He said the scheme can create a sense of urgency, leading to a “forced purchase.” By spending over ₹1,00,000 on an ornament you don’t currently need just to get a ₹7,500 bonus, you are making a poor financial trade. You are converting a large amount of your liquid savings into a less liquid asset that you didn’t even want.
The Financial Loss from Making Charges
I was discussing this with my friend who went through this. She decided to buy a simple chain she didn’t really need, just to use up her plan’s balance before the bonus expired. The chain had 15% making charges. This means that the moment she bought it, its resale value was already 15% lower than what she paid. This financial loss from the making charges was far greater than the bonus she had received from the scheme.
A Better Strategy: Wait or Minimize Your Loss
My advisor suggested two much better approaches. First, he advised checking the validity period of your bonus and trying to wait as long as possible until you genuinely have a need for a gift or personal jewellery. If you absolutely must redeem the plan before the bonus expires, he recommended choosing a very simple, classic item with the absolute lowest possible making charge to minimize the financial loss from the forced purchase.
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