Increase your Equifax,Experian,CIBIL Credit Score

It’s a common misconception that credit scores cannot be changed or increased. Every financial decision you make and step you take that’s on record, and related in any way to credit, is recorded by Credit Information Companies (CICs) like CIBIL, Equifax, Experian, etc. and this is what determines your score.

A lower score is an indication of irresponsible behaviour with credit. For example – not paying back loans on time, delaying credit card dues by only paying the minimum monthly amount, over-borrowing, over-utilizing credit despite a large income, having an unfavourable credit utilization ratio, etc. All these things can damage your credit score and will be mentioned in your credit report. Negative remarks and lower scores will mean that you won’t be able to get loans approved in the future.

A higher score, on the other hand, is an indication of responsible credit behaviour. For example – meeting all your EMI payments on time, clearing off credit card dues in full before they compound, debt consolidation, low credit utilization ratio, etc. All these favourable practices work towards building your credit score and sustained practice of this type of financial behaviour could even send your score well above 750 or even 800.

How to increase your CIBIL score fast?

Well, the honest answer to this is that there’s no real way to fix your CIBIL score overnight. It will take at least a few months to get the ball rolling in that regard. Three months is the soonest you could expect to see any positive change in your credit score, without making huge lump sum payments to clear off pending loans. In 6 months, you could see a gradual incline in your report, and in a year, you could even change your overall score by a huge margin. That is, of course, if you heed the following suggestions and make the right decisions with your money:


  • Use your credit card: This may have been what damaged your score in the first place, but using your credit card in the right way is one of the easiest ways to increase your credit score. Using your credit card right means setting a tiny limit – say 10% of your monthly income – and using the card for recurring purchases up to that amount. Suppose you earn Rs.70,000 per month – use your credit card for Rs.7,000 every month on a recurring expense like groceries or fuel. Using your credit card is basically utilizing credit facilities offered by financial institutions. A small amount like this is easy to clear off on or just before the due date, and won’t hurt your wallet. Consistently clearing off these small-term and small-scale borrowings will reflect positively in your report. This is just step 1, however, but it is absolutely necessary.
  • Clear each and every EMI: While the general rule is that you can miss one EMI if you’re in a pinch, but two would result in dire consequences, it’s advisable not to miss any EMI payment for any loan no matter what the reason. People sometimes actively miss EMI payments just to make use of the one month grace period, but don’t realise that it goes on a permanent record. This permanent record is your credit score. Pay all your EMIs as and when they become due, and you won’t have the problem of dealing with penalty interest or a damaged credit score.
  • Check and re-check your Credit Information Report (CIR) for errors: The CIR or Credit Information Report generated by CIBIL is not impervious to errors, and since the data collection is largely computerized – it leaves a lot of room for silly errors and mistakes that could negatively impact your score. Take for example the case involving Mr. A Dutta of Mumbai. He purchased a property at a particular address, and his credit score was destroyed after this purchase. Why? Because the previous buyer of that property had defaulted on his home loan, and the address was marked with a red flag. Mr. A Dutta had his credit score damaged through no fault of his, but just because the system implicated Mr. A Dutta thinking that he was the one who defaulted on the home loan. The system reports all the data it has to Credit Information Companies (CICs) like CIBIL, and CIBIL doesn’t have to verify this information before it makes it available to lenders and financial institutions. What matters at the end of the day is what’s written in the report, and if you’re like Mr. A Dutta, you will have to contact CIBIL through their website and report the fact that there is an error in your CIR.
  • Make sure you take NOCs (No Objection Certificates) from every lender after you’ve cleared your outstanding dues: Usually when we have some overdue outstanding amounts that we owe to lenders, we arrange for a settlement for a lesser amount than the total owed. While settlements do damage your credit report in a small way, not having a NOC (No Objection Certificate) issued by the lender can have disastrous effects on your score. Most people are just so happy after clearing off their dues that they don’t bother getting this highly important document. The old loan details will appear in your CIR as an open loan that’s not been cleared, but can be removed if you have a NOC as proof.
  • Don’t inquire for loans unless you’re sure you want to borrow: Making unnecessary loan inquiries lowers your CIBIL score – yes, that’s true. This harmless act could have serious consequences. Inquire for a loan only when you absolutely need it and when there’s no other way for you to move forward except taking out the loan. This applies for all kinds of loans – home loans, car loans, personal loans, etc. If you are inquiring to find out your eligibility, don’t do so in a formal fashion after approaching the bank – but use any of the loan eligibility and loan EMI calculators available online.
  • Pay attention to your Credit Utilization Ratio: Granted, this may not be a term you’re familiar with but you will in the coming months as CIBIL and other CICs become known as the reason people aren’t getting loans. Your Credit Utilization Ratio is the amount of credit you take on as compared to your regular income. Consider the following example: Mr. A earns Rs.70,000 per month, but uses his credit cards up to Rs.50,000 per month and clears off the dues before the due date, and before they gather penalty interest. While this is responsible financial behaviour in the sense that dues are paid off before they’re due – it is also a form of very irresponsible behaviour, as Mr. A would not be able to meet that large payment if his income should stop for whatever reason, for even a month. It is unlikely that he has been able to save enough with his salary to clear off his Rs.50,000 debt in any given month, and it’s obvious that this will remain as an amount owed until he re-establishes his source of income. By which time the same Rs.50,000 would be a far greater amount thanks for penalty interest compounding. Mr. B, on the other hand, has an income of Rs.70,000 but uses his credit card every month for Rs.20,000. This is a considerably smaller amount of Credit Utilization Ratio, and Mr. B would easily be able to clear off any outstanding debt on his card should his income stop for whatever reason. CICs consider the amount of credit taken on versus the earning capacity of the borrower to decide whether they are intelligent and responsible in terms of financial management.


Proving that you are responsible and intelligent when it comes to your finances, and that you can be trusted with credit is what any CIR (Credit Information Report) is all about. It is a document that either instils confidence in the lender that you can repay what you owe, or tells the lender that the chances are high that you may default on your loan.

Clear out the errors and make sure you handle your finances responsibly, and you won’t have any problem with CIBIL, Equifax, or Experian.


Which banks to approach for loans if you have a low Experian Credit score

Are your loan applicants constantly getting rejected due to “insufficient credit score” by Experian Credit score? Well, there are still ways to get a loan depending on which bank you choose and how well you negotiate with the bank representative.

Experian India

Credit scores are only one of the factors considered by banks and lenders before approving a loan. Granted, that it is one of the more important factors, but the way you pitch your loan requirement to the bank could be the difference between having a loan approved or rejected, despite a low credit score.

When you approach the bank, you need to have a well-thought-out idea of why you need the loan, what you intend to do with it, and how the loan would enable you to increase your level of income to such an extent that you are able to repay the loan on terms acceptable to you and the bank. Convincing the bank representative of why you need a loan shouldn’t be that difficult, if you’re smart. If you don’t have a proper plan as to how you intend on repaying your loan, maybe you’re better off not taking the loan in the first place.

A well thought out plan should include the following:

  • Your reason for taking the loan. If you want a loan to travel or go on holiday, and you have a bad credit score, don’t even bother approaching the bank because you going on holiday is not going to generate any money for the bank. If you want a loan to set up a business that you believe will succeed and your customers will be able to pay for the product or service, the bank may consider you to be a viable candidate.
  • Your spending plan. While this is entirely your business, telling your bank where you intend to spend and how much you intend to spend and for what purpose, could instil a sense of confidence in the bank that you have your ducks in a row. Again, spending here shouldn’t be on a dead investment like a fancy new car or a high performance stereo system, it should be spending in the form of investments in assets that can generate income, or can help you generate income.
  • Your business plan. The product or service you wish to produce and sell to the masses must be clearly thought out and all contingencies should be anticipated. The business plan should be constructed in a future where the bank has approved your loan application, and you must be able to communicate the projected growth or planned rollout of your product or service in the market.
  • You repayment plan. After the bank approves your loan and you’re established – how long will it take for you to realize a profit on your venture? You can negotiate the first repayment and when the EMIs start at this stage, by communicating to the bank that the money taken as a loan can only start generating an income after “x” number of months / weeks in your particular case.
  • Contingencies. Any plan is only as strong as the preparation put into it. Preparation is incredibly important, but excellent preparation is only half the battle won. You must plan for everything that could potentially go wrong at every stage of your venture, and plan a countermeasure to deal with it. Communicate this with the bank and they will be confident that you are deserving of the loan as you have every intention of paying it back, and won’t use contingencies as excuses to delay payments.

Most of the above points are for loans taken to start businesses for the selling of goods or the provision of services, but they can be altered depending on your particular case. Just remember that the bank will undoubtedly approve your loan if you’re able to convince them that you can pay them back. A Experian Credit score, at the end of the day, is nothing more than a confirmation that you have performed well with debt in the past, and that you honour your repayments. If you can convince the bank of this without a Experian Credit score, your loan is as good as approved.

Even so, if you aren’t able to (or don’t want to) spend so much time in the branch manager’s office trying to convince him / her to give you money, you can always apply at these banks who accept a score below 750 / 800 for various types of loans:

  1. IndiaBulls offers home loans of up to Rs.50,00,000 to applicants with credit scores as low as 680 at 9.45% for a 20 year tenure.
  2. DHFL offers home loans of up to Rs.50,00,000 to applicants with credit scores as low as 680 at 9.50% for a 20 year tenure.
  3. HDFC bank offers home loans of up to Rs.50,00,000 to applicants with credit scores as low as 700 at 9.45% for a 20 year tenure.
  4. ICICI bank offers home loans of up to Rs.50,00,000 to applicants with credit scores as low as 700 at 9.45% for a 20 year tenure.
  5. IndusInd Bank offers personal loans of up to Rs.5,00,000 to applicants with credit scores as low as 700 at 14.50% for a tenure of 5 years.
  6. HDFC Bank offers personal loans of up to Rs.5,00,000 to applicants with credit scores as low as 700 at 14.49% for a tenure of 5 years.
  7. ICICI Bank offers personal loans of up to Rs.5,00,000 to applicants with credit scores as low as 700 at 14.49% for a tenure of 5 years.
  8. Bajaj Finserve offers personal loans of up to Rs.5,00,000 to applicants with credit scores as low as 700 at 14.49% for a tenure of 5 years.
  9. Axis Bank offers auto loans of up to Rs.5,00,000 to applicants with credit scores as low as 725 at 11% for a tenure of 5 years.
  10. HDFC Bank offers auto loans of up to Rs.5,00,000 to applicants with credit scores as low as 725 at 9.65% for a tenure of 5 years.
  11. ICICI Bank offers auto loans of up to Rs.5,00,000 to applicants with credit scores as low as 725 at 10.75% for a tenure of 5 years.
  12. L&T Finance offers auto loans of up to Rs.5,00,000 to applicants with credit scores as low as 700 at an interest rate that the bank will communicate to you, for a tenure of 5 years.

It’s important to note that banks will hold the fact that you have a lower Experian Credit score against you, and try to get you to sign the papers for a higher interest rate than the one advertised. Negotiation can go a long way here, and you can secure the loan you want for the rate you want.

The banks could also use the fact that you have a low Experian Credit score to approve a smaller portion of the loan. For example, a person with a high Experian Credit score (say around 800) applying for a home loan could have up to 80% of the property value financed through a loan, whereas a person with a lower Experian Credit score (say around 650) could have only up to 50% of the property value financed through a loan.

Don’t apply for a loan at too many banks at the same time. Keep it at one or two, as banks can find out how many other banks you’ve contacted for a loan, and this makes them weary of lending to you.

Approach your bank first. The bank in which you have your salary account or savings bank account already likes you (probably) and will be in a better position to listen to you and understand your situation.

Try NBFCs. Non-banking financial companies usually approve loans where banks won’t. Some may have higher interest rates or stricter conditions, but if you’re confident in your ability to repay – this is a viable option. Steer clear of loan sharks, stick to the registered NBFCs. NBFCs usually don’t care about your credit score, they just care that they’ll get their money back eventually.


The Correlation Between CIBIL Scores, Loans and Credit Cards

Any individual looking to obtain a loan or a credit card from a bank or a financial institution will most certainly need to possess a good CIBIL score in order to do so. While there are other factors involved in determining whether an individual is eligible for a loan or not, a high CIBIL score is the most important determinant in this day and age. In fact, it is nigh on impossible to acquire a loan or a credit card without a decent CIBIL score to highlight an individual’s creditworthiness.CIBIL

What Is A CIBIL Score?

A CIBIL score is a numerical representation of an individual’s credit history. Everything from loan and credit payments, bill payments, outstanding dues, etc is reflected in an individual’s CIBIL report, which shows whether he or she is financially stable or not. This is distilled into a numerical representation between 300 – 900 that represents the individual’s CIBIL score. Usually a score of above 750 is considered acceptable by banks and financial institutions to approve a loan or credit card application.

What Can An Individual Do To Improve His or Her CIBIL Score?

There are many ways through which individuals can raise their CIBIL scores in order to acquire a loan or a credit card. Some of the most common ones are as follows:

  • Pay off outstanding dues – Individuals with pending or outstanding dues on other loans or credit cards generally have low CIBIL scores. This severely affects their chances of acquiring loans or credit cards from lenders since it is a reflection of poor financial health on the part of the individual. By paying off these dues quickly and consistently, CIBIL scores are positively affected, which in turn prove the individual’s creditworthiness to the lender he or she is approaching. Outstanding credit card dues are generally considered to be one of the main causes of low CIBIL scores. Therefore it is in the individual’s best interest to pay them off as soon as possible.
  • Maintain low debt – Individuals with huge debts also have a lower chance of acquiring loans or credit cards due to the detrimental effect it has on their CIBIL scores. Lenders look into the amount of loan debt an applicant has acquired over a period of time, as well as his propensity to pay off the debt. Accumulating debts over a considerable duration negatively affects an individual’s CIBIL score, making it less likely for that individual to be granted a loan or a credit card. By maintaining a low debt balance, customers can keep their head above water even after taking on more loans.
  • Make payments consistently – Banks and financial institutions also take into consideration the frequency with which an individual makes repayments towards any other outstanding loans or dues he or she might have. Paying off other debts consistently helps increase an individual’s CIBIL score and acts as proof of the person’s financial health. Lenders are more likely to roll out a loan or credit card to such individuals, safe in the knowledge that the applicant will not default on any of the payments.

Top Credit Card facts for the festive season

The festive season has already hit Indians once again and the market is teeming with offers and discounts across all sectors of the economy. One very important aspect of shopping during festivals is money to pay for. With a host of personal loans and credit card offers making the rounds during festive periods, customers have a lot of paying options to choose from. Banks and other lending entities run special festive offers on credit card spends during such times. However, there are a few facts about these offers that if kept in mind will help you gain maximum out of your credit cards without being tricked into overspending.

  • Check your CIBIL report to see its updated

Checking regularly your CIBIL score and report is the best way to keep a track of your credit history. This makes it easy for you to plan your credit and know beforehand your points of improvement. Also, if you apply for credit without checking on your score and in case you get turned down by the lender, then it has a negative impact on the credit report. However, if you check your score before applying, you can improve it if it is poor before applying with any lending entity.



  • Credit cards have fees associated with them


It is good practice to find out everything about the related fees and charges for a credit card before availing one. Charges pertaining to credit cards include annual fees, joining charges, supplementary card charges etc. Late payment charges and charges for flexible payment via EMI are other fees that may be applicable to certain credit cards.


  • Credit cards let you withdraw cash but that’s expensive


Most credit cards offer you the flexibility to withdraw cash from ATMs. This is true for both domestic and overseas withdrawals. However, taking out cash via credit cards is an expensive transaction and may attract substantial fees and charges. Customers should take utmost care to avoid using their credit card to avail cash unless absolutely unavoidable.


  • Swiping your credit card overseas may be expensive


Many credit cards in the Indian market today offer both domestic as well as international applicability. Howevers, cards issued in India may cost you fees when swiped abroad. This is because of two factors, one is the conversion rate that is used to convert foreign currency to Indian Rupee and second is the foreign currency transaction fee that is applicable in cases of these foreign transactions made via your credit card. This fee is generally equivalent to 3.5% of the converted Indian currency amount.


  • Credit card reward points are a good bet


Credit cards offer various unique and popular features that can work in your favor. One such feature is the credit card reward point scheme that most credit card providers offer. These reward points are redeemable across a host of online and offline platforms. These can be redeemed to obtain shopping vouchers, gift items, air miles, coupon codes etc. However, in order to make the most of your reward points, it is imperative to know their validity. This will ensure that you do not miss out on the redemption scheme and are able to redeem your points before they lapse or expire. Also, big purchases during the festive season, like those of electronics and furniture, add huge number of reward points that can be redeemed to avail a host of products and services.


  • Late payments of credit card bills is to be avoided


Late payments are one of the foremost reasons of customers getting entangled in a vicious circle of credit card debt. Late payments have dual repercussions of one, piled up payments to be made and two, late payment fee added to the original bill amount. This makes it extremely difficult for credit card users to balance in line with their regular monthly budget. Customers who once get caught in this circle of pending credit card payments make huge payments since late payment fee is charged as a percentage of the pending bill and as such accumulates into heft interest amounts.


With the above points in mind, it will no doubt, be easier and more rewarding for you to experience the festivities this Diwali season. Credit cards are a great financial tool to make wise use of and make the most of your purchases. So, happy shopping to you!

Check-up on Your Credit Score in 6 Simple Steps

When one thinks of financial check-ups, the most popular choice that comes to mind is the Credit Information Bureau of India Limited which is also known as CIBIL. CIBIL is the country’s standard format for credit scores and any bank, non-bank financial institution or any other financial institution will check the applicant’s CIBIL score before approving any applications for loans and hence it is imperative that one knows their CIBIL score.

With the New Year, many people set themselves goals of losing weight, being healthy, being fit and giving up vices such as smoking and as important as it is to be healthy and take up healthy habits and keep a check on one’s health, it serves one well if they checked up on their financial health as well. An annual check-up of one’s health is beneficial in many ways and can help diagnose and detect illnesses or anomalies earlier on, similarly financial health check-ups every year will keep your credit score in good stead.

Any person can be up to date on their CIBIL score by following these six simple steps

1)      Acquire and Fill up the CIBIL score request form online: The first step in acquiring the CIBIL score is to log onto the website of CIBIL and go to the section for applying for the credit score. The direct link to this section for accessing the request form can be reached by clicking on the following link.

2)      Filling in the details: Once the request form has been acquired, the applicant needs to fill in the necessary fields of information. The applicant will have to provide all details requested and the more details provided, the better. The details that are normally required to be filled in include PAN card, Passport details and other identity proof details such as a Driver’s license or Voters ID

3)      Submission of the form and Payment: After the applicant has filled in the form and verified it by entering the anti-spam codes, they are required to click on proceed to payment option which will direct them to the next page. This page will require them to authenticate a payment. The payment for credit score request is Rs 500. This payment can be made through Debit or Credit Cards or through Net banking facilities.

4)      Authentication: This step follows the payment. The system on the authentication page generates a set of questions, usually around 5 that are based on the details submitted and may range from details of the current loans or the details of the applicant’s bank account. A minimum of 3 successful answers should be given for authentication success

5)      Confirmation: The final step is confirmation. Once the confirmation message has been generated by the system, the applicant will receive the CIBIL scores within four business days. Applicants will also receive a payment receipt confirming the payment made towards the request

6)      The authentication fail step is needed only if the 4th step is unsuccessful. In case authentication is unsuccessful, a copy of the payment slip along with self-attested documents need to be sent over to the registered corporate office of CIBIL in Mumbai. Applicants can also reach out on the helpline number for any guidance which is +91-22-61404300.

The payment towards acquiring the CIBIL Score is a meagre amount and the process is relatively hassle free. The online process is convenient and allows applicants to view their credit scores and make sure they are on top of scores that are straying or falling below the desired levels.

Importance of Credit Score

Credit score is an important component of your financial background. Even if you haven’t actively monitored or worked towards building a credit score, you already have one thanks to the dealings with various financial institutions who feed your financial data to CIBIL. CIBIL is responsible for providing credit score or CIBIL score to people.


CIBIL score and CIBIL report are arguably the single-most important component that defines whether you will be receiving any form of credit from a financial institution, be it a credit card or a loan. As such, it is imperative that you actively try to maintain a good credit score by having a good credit history.

Let’s say you have acquired a personal loan, a home loan and a credit card from three different institutions. All the three institutions will be fed to CIBIL, which will then analyse this data and come up with a credit score. Therefore, all your financial data is eventually consolidated by CIBIL so as to provide an outline on your financial background.

What is a credit score?

Your credit score will be a 3 digit number lying between 300 and 900. A high score implies good credit history while a score towards the bottom implies financial mismanagement and unpaid dues in the past and present.

When you are applying for any form of credit, the bank or the lender will approach CIBIL with a request for your CIBIL report and score. CIBIL will then forward a copy of your report to respective authorities.

How do I access my credit report?

You can access your credit report from the bank or lender with whom you have applied for credit. Alternatively, you may directly approach CIBIL and get your report in a few simple steps. You need to fill up and submit the application form, which can be downloaded online. Next, you need to pay the amount for the report through online means. On completing the online authentication process which establishes your identity, you will instantly be given access to your credit report. There’s also the option to complete the authentication process offline once you have emailed all the relevant documents.

Who are allowed access to my credit report?

All credit institutions, financial sector entities and the whole banking industry are allowed by law to access and work with CIBIL to contribute towards and access a person’s credit report. Telecom industries also have access to your CIBIL report and this is mostly used when postpaid connections are applied.

Insurance companies are also allowed access to CIBIL reports of individuals. Brokers or other credit rating agencies can also become CIBIL members and access credit information pertaining to clients. As such, it is no more only about getting loans or credit cards – your CIBIL score will likely imbue itself with all your financial dealings. Therefore, it is advisable to actively work towards building a good credit score so that you are allowed to access the full spectrum of financial services on offer.


Kerala’s unique gold jewellery

The crafting of gold into intricate and exquisite jewellery is an art form that takes many years of dedicated effort and patience to master. Goldsmiths in Kerala have not only honed their skills and attained mastery of this craft, but have also customized it to suit the needs of people in the region by giving it a very specific kind of aesthetic appeal. Not by any small coincidence, gold necklaces (particularly the bridal ones) in Kerala have their own unique style and are sought after the world over.

Goldsmiths purchase gold at the current gold rate in Kerala, and get to work making these masterpieces. Gold jewellery and necklaces in Kerala are very popular, and people buy gold not only to establish their level of success and standing in society, but also as a very effective investment.



  • Jasmine bud (Mulla Mottu) necklaces have small ‘petals’ of gold all along the length of the necklace, masterfully crafted to very specific standards of size, uniformity of the petals, and quality.
  • Lakshmi Mala necklaces have many gold coins imprinted with the image of the goddess Lakshmi, and are connected with smaller pieces of gold to the main spine of the necklace. It’s a lot of gold, and the central gold coin is generally larger than the others, which are all of a uniform size and weight.
  • Palakka Mala necklaces are a perfect example of gold and precious stones used together to create a stunning work of jewellery, which has both gold and stones used in such a proportion that they complement each other, and enhance the overall beauty of the piece.
  • Kaasu Mala necklaces are among the most lavish necklaces that use a large number of gold coins set very close to each other, hanging individually off the spine of the necklace. Gold coins of a standard size and weight are flatly overlapped very close to each other to give the impression that it is a single thick necklace of gold, but each is allowed to shine individually as they are not directly connected to each other.
  • Pathkam necklaces are basically pendants with gold chains, but the mastery of the goldsmiths has brought these to the forefront in terms of popularity. The pendants are usually huge single chunks of gold moulded to be aesthetically appealing, and hang perfectly in the centre of a fine gold chain.


All the styles of gold necklaces can be found in popular locations to buy gold in Kerala.

Global gold prices and Fed rate hikes

Learned wisdom

According to conventional wisdom in the financial markets, gold rates are inversely proportional to Fed interest rates in that during times of ultra-loose financial policy measures, gold prices increase.

Also, since monetary stimulus such as quantitative easing can pave way for inflation, the demand for the precious yellow metal may increase given that it is considered a good hedge against inflation. As is the case with other commodities, gold prices are determined by the supply and demand trajectory on a global scale. However, it is important to note that changes in the supply side of gold occur very slowly and therefore, any wide fluctuations at the margin originate from the demand side and more so the investment side. While the jury is still out on whether the gold prices fall as a direct result of Fed rate hikes, there is a view that around four-fifths of the yellow metal’s bullish run during 1970-80 can be attributed and even mathematically proved to be a result of rising interest rates at the time.

Gold prices and rate hikes

Intriguingly, the bullish gold market of the 1970s was witnessed during times of high interest rates. According to a school of thought which goes against this grain of the aforementioned conventional wisdom, traders, across the globe seek status qua and more often than not, base their decision on fear about any change in market conditions and therefore, chose to believe that stock markets will rally without any corrections. However, there is considerable evidence which reveals how gold price in 1973 and 1974 increased owing to Fed rate hikes. Likewise, gold price fell in 1975-76 on the back of plummeting interest rates. Again, there was a hike in the price of gold in 1978 and 1979 as interest rates rose.


There is a view that rising interest rates prove to be bullish for gold since the former is bearish for stocks. When conventional asset are taking a beating, several investors flock towards the yellow metal. Rising rates, in many ways, result in overvaluation of stock markets, as it were. It has been observed that during times of higher interest rates, corporate profits are hit, which result in reduced earnings. According to experts, stock markets, decline during interest rate hikes. As a result, investors seek solace in alternative investments such as gold. For instance, when gold prices rose by 186% in 1973-74, the S&P 500 fell by 42% during the same period. Likewise, when the S&P 500 index rose by 57% in 1975-76, the price of gold plummeted by 28% in the same period. During the last big rate-hike cycle between June 2004 and 2006 when Fed raised interest rates to 5.25%, the price of gold rose by 49.5%. One of the other woes faced by the precious yellow metal is the US monthly jobs report. Traders in gold futures tend to panic on the prospect of a rosy US jobs report, anticipating a Fed rate hike.

Reason Why the Price of Gold Fluctuates

Among the countries around the world, India is the largest consumer of gold. Being on the top of the list, India’s gold jewelry demand is around 36%, which is the largest share in the world. The country also consumes around 22% of the world’s total coin and bar investments. In 2010 alone approximately 958 tonnes of gold was imported by India. The demand of gold jewelry increases during festivals, which are considered auspicious periods for buying gold. The sale of gold and the gold rate also goes up during the wedding season.

One of the key factors that influence the price of gold is because of the production cost, determined by gold producers in order to maintain profitability. The volatility in the gold price occurs due to the following reasons:


Gold Import Restraints

Gold, in India, is preferred as an investment option. However, with the government and RBI taking stringent measures to restrain the import of gold has  slowed down the demand of investing in this precious metal.

Higher domestic gold inventories

According to 2014 reports, India was voted the top consumer of gold in 2014. Also in the first quarter of 2015, it became the second biggest consumer of gold, after China. Higher domestic inventories have also impacted the pricing of gold, leading to fluctuations.

Monsoon Concerns

Monsoon also impacted the price of the bullion. With India being an agricultural country, farmers play a key role in  the demand for gold. With no formal banking system to access two-thirds of the country’s population, which hails from rural areas relies on gold as their investment option and wealth store. With monsoons being sluggish this year and crops growing less, the demand has come down.

Massive dumping in China

With China selling a large amount of gold in the market, the prices slipped further. The Shanghai spot market sold approximately 33 tonnes of the precious metal. The gold reserves in China were lesser than the expected level, which added pressure on selling the precious metal, as investors sought other avenues.

Stronger US dollar

With the dollar rates hitting a high and other currencies dropping  made commodities denominated by the dollar more expensive. Gold priced with dollar became expensive in the market lowering the demand of the metal. Indian gold prices witnessed a downsizing in recent times, because of the high rates of the US dollar.

Hike in US Fed Rates

With the dollar gaining the higher rate in the market, the US economy is expected to expand. The rise in interest rates for higher returns will attract investors, driving up the value of gold.

With the dizzying rise and fall of the gold prices, the conflict whether to invest in gold continues. Whether, the current prices will plummet further or rise, only time will tell.

Gold Saving Schemes – how do they work?

Gold, being the number 1 priority savings instrument for the Indian masses, now has schemes that are centred on enabling people to own it more easily. Jewellers have designed “gold saving schemes” which are supposed to help people save up a sizeable chunk of funds, which they can then spend on gold jewellery.

How it works is that you regularly invest a set amount of money every month, for a predetermined period of 1 or 2 years, and the jeweller covers one bonus instalment towards the end. At the end of your deposit tenure, you can use all these saved up funds to purchase gold jewellery.

Let’s break it down.

  • Non-transferable investment.

You invest a fixed amount each month for a fixed period of time and towards a fixed goal – you can do this with other instruments like recurring deposits, etc. for a better return on investment and more flexibility. Money invested towards a gold saving scheme can only be used for purchasing a very limited range of gold jewellery from a specific seller. If you were to invest the same way, at the same rate in a recurring deposit, you would have the same (or more) amount of money to spend at the jeweller of your choice, on the design of your choice – or if you’ve changed your mind by then you can go buy a motorbike or something.


  • It’s a regular money saving scheme.

The scheme’s marketing makes it seem like you’re buying gold every month, when in reality, you’re just setting aside a certain sum every month in order to buy gold at a later date. It’s a simple matter of keeping money aside every month. You can do this with a piggy bank in your house, or invest in a recurring deposit scheme or a savings bank account and earn some interest. The only difference is that the bonus instalment your jeweller gives you at the end of the scheme gives you a 8-10% return on your total investment.

  • Specific purpose directed investment.

The monthly instalments you make are directed towards purchasing gold jewellery. If you change your mind halfway through and wish to purchase gold bars, coins or bullion, you’re in for a disappointing conversation with the jeweller. You can only select jewellery from a specific range, as decided by the jeweller. You can’t buy any jewellery you want, and your personal choice and taste does not matter at the end of the day. The jeweller decides what gold jewellery you buy. If you want to use the saved up funds to purchase a set or piece of jewellery apart from the pre-decided plan-specific range, you will have to pay additional making charges which effectively means that your 8-10% return on investment is useless.

  • Jewellers use these schemes to guarantee future sales.

By making you invest your hard earned money every month towards their own jewellery store, gold jewellers effectively ensure that customer come back and buy from them at a future date. Not only that, once you take a gold savings scheme from a particular jeweller, you have no choice but to purchase jewellery from that jeweller only. You can’t transfer your savings or withdraw them for their cash value.

  • Gold rate fluctuations

The gold rate from when you start investing and when you’re able to use your investment will not be the same. And the rate at which you will have to purchase the gold is the rate at the end of the investment tenure, not the rate as on the date you started investing. Bear in mind that the gold rate will, on an average, be higher than it was the previous year and you will have to spend at that rate, regardless of whether you want to wait for a few days for a small dip in gold prices.

What does the jeweller do with your monthly investment?

Well, the jeweller offering you the scheme can do literally whatever he wants with your money, including taking it and investing in a recurring deposit scheme and earning a decent profit. There is no real gold getting credited to your account, no real monetary gain you’re making. The jeweller is simply ensuring that you come back and buy from his store at the end of the tenure, and sweetens the deal by giving you one month’s investment (or some other benefit, which is easy for him to do now that he has made a decent profit off your investments).

When do gold saving schemes work?

Gold savings schemes make sense for those few select people who have planned a wedding a couple of years down the line and have not heard of any other investment or savings instrument apart from a gold saving scheme.

Investing regularly in any investment vehicle that offers you decent returns will have the same result as a gold savings scheme in terms of how much money you’ll have at the end of the tenure to buy gold – with the added advantage of flexibility in where you spend that money.

One good time to invest in such a plan, however, is if you know the jeweller well, and trust his designs, and have a wedding planned for a year or two from now. It becomes easier to save through these schemes if you know that you’re getting exactly what you want at the end of the scheme.

Here’s a list of popular gold saving schemes in the market right now:

  • “Jewels for less” by PC Jewellers.
  • “Shagun” by Gitanjali Jewellers.
  • “Gold Tree” by GRT Jewellers.
  • “Gold Harvest” by Tanishq.
  • “Jos Alukkas Gold Saving Scheme” by Jos Alukkas.
  • “Gold Schemes” by Bhima Gold.
  • “Kalpvruksha” by Tribhuvandas Bhimji Zaveri.