Get the Best Deal on a Diamond Ring

Welcome to proposal season. According to wedding site TheKnot.com, 38% of couples get engaged between the beginning of November and the end of February. "The holiday season is the perfect opportunity to surprise someone with an engagement ring. You get to share the news with all your family and friends immediately because you're more than likely having dinner with them that night or the next day," says Jamie Miles, former managing editor of TheKnot.com.

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More good fortune for lucky-in-love couples: It's a good time to buy diamonds. Prices are dropping along with demand as consumers worldwide (especially those in China) trim discretionary spending in light of turbulent financial markets and slow economic growth. According to the Rapaport Group, an international diamond trade research firm, prices for one-carat diamonds have fallen 11.7% over the past year. Of course, even at discounted prices, engagement rings can still cost a pretty penny. Engaged couples spent an average of nearly $5,900 on a ring in 2014, according to theTheKnot.com.

Where to Shop for a Diamond

To make sure you're getting the best deal possible, your first stop should be online. TheKnot and engagement-ring site Ringspo.com don't sell rings themselves. But they offer galleries of rings from a variety of vendors (the former lists more than 4,000 options; the latter includes almost twice as many). Both allow you to search by metal type and stone shape. The Knot also lets you shop by designer. On Ringspo, you can choose the kind of stone (diamond, emerald, ruby or sapphire), setting style and price.

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Once you've researched online, compare jewelry-store prices with those prices you found on the Web. Digital diamond dealers have lower operating costs than brick-and-mortar shops and can afford to pass the savings on to you. "The difference can sometimes be as much as offering the exact same diamond for half the price," says Alastair Smith, author of How to Buy an Engagement Ring.

However, if haggling is your thing, dealing with a human at a traditional diamond retailer may give you the opportunity to drive down the price. If you shop online, you're not likely going to have much wiggle room.

Regardless of where you ultimately buy, seek a lifetime warranty and the option to return the ring within 30 days, no (awkward) questions asked. Online jewelry giant Blue Nile offers all of the above, as well as free insured overnight shipping. Also make sure that the diamond in your ring is certified. "Your diamond should be graded by a reputable independent authority," says Smith. The top two grading organizations, the Gemological Institute of America (GIA) and the American Gem Society (AGS), will examine your stone and vouch for its carat, weight and quality.

5 Ways to Save on Diamond Rings

Even more important than where you buy is what you buy. Without compromising much in terms of style, you can select or design a ring for less by going with these choices:

A halo setting is both trendy and cost-effective. As the name suggests, the design is a ring of small diamonds circling a center stone. Essentially, you can downgrade the main rock, but still create the illusion of additional carats, says Miles.

Choosing anything other than a round stone, the most popular and most expensive option, can lead to significant savings. Smith estimates that choosing an oval or cushion shape can cut the price of your diamond by 30% without sacrificing quality or size.

A rose gold band is another hot trend for engagement rings that can be good for your budget. Miles notes that platinum is the most expensive metal. "So if you're opting for anything other than platinum, you're going to save some money," she says.

A prong setting is more cost-effective than a bezel because it requires less metal. The prongs raise the diamond above the band while a bezel setting hugs the stone. Bonus: "Since more of the stone is visible, a prong setting gives the appearance of a larger stone," says Miles.

A size just shy of a full carat can snag you some striking savings. "If you buy, say, 1.8 carats instead of 2 carats, you can save nearly 20% and it's hardly noticeable," says Miles.

Rapacon joined Kiplinger in October 2007 as a reporter with Kiplinger's Personal Finance magazine and became an online editor for Kiplinger.com in June 2010. She previously served as editor of the "Starting Out" column, focusing on personal finance advice for people in their twenties and thirties.

Before joining Kiplinger, Rapacon worked as a senior research associate at b2b publishing house Judy Diamond Associates. She holds a B.A. degree in English from the George Washington University.