Since ancient times, gold has been a symbol of wealth, and it has managed to maintain its value as an investment even in the Information Age. Gold as an investment is no longer limited to purchasing ornaments or jewellery; it now encompasses a wide range of possibilities. Other ways to invest in gold include Gold ETFs, Gold Mutual Funds, E-Gold, and so on, each with its own set of advantages. If you're looking to invest in gold, here's a guide to the various gold investment options available in India. These are some of the best ways to invest in gold online.
Digital gold is kept in vaults and stored online. You can buy gold digitally based on its weight or by specifying the amount of money you want to spend. The government-owned MMTC is issuing the Digital Gold in collaboration with PAMP of Switzerland, a global leader in bullion branding. PhonePe, Paytm, SafeGold, Google Pay, MobiKwik, and other mobile e-wallets, as well as online banking apps and websites, offer digital gold. You should take a close look at digital gold as an asset class. It's not just about the allure of gold; it's also about the security and protection that Digital Gold provides with minimal effort. These transactions can be used to sell digital gold and obtain liquid cash. Alternatively, you can get your money back by buying the gold you bought in physical form. Digital gold investment is treated similarly to physical gold ownership for all tax purposes. The amount of tax you must pay is determined by the holding period.
An exchange-traded fund (ETF) that tracks the domestic physical gold price is known as a gold-backed ETF. Gold-backed ETFs are financial instruments that are made up of paper or dematerialized units backed by physical gold. One gramme of physical gold is typically backed by one gold-backed ETF unit. These funds claim to be backed by gold that is 99.5 percent pure, there is less concern about gold purity than in other contexts. Prices for gold-backed ETFs can be found on the NSE website, and they can be purchased or sold through a broker when trading takes place on the Stock Exchange. It's worth noting that, unlike jewellery, gold-backed ETF units can be purchased and sold at the same price across the country.
Gold Mutual Funds
Gold Mutual Funds are investment vehicles that invest primarily in gold ETFs and related assets. Although Gold Mutual Funds do not invest directly in physical gold, they do so indirectly through Gold ETFs. It's just as simple to invest in gold funds as it is in mutual funds. One reason is that, unlike gold ETFs, gold funds do not require a demat account to invest. Plus, with a Systematic Investment Plan, you can divide the total investment amount into monthly instalments (SIP). You can take advantage of rupee cost averaging this way. You can structure your gold fund investments by investing in SIPs. To begin investing, you do not need a large sum of money. You can begin investing with as little as Rs 100 per month. As your income rises, you may want to consider increasing your investment.
Sovereign Gold Bonds
SGBs are issued by the Indian government at various times. Investors can subscribe to SGBs at any time after the issue is announced. On allotment, investors can invest in gold bond certificates in denominations of 1 gram. They receive the value of gold at the time of redemption based on the simple average closing price for the previous three business days. During the term of the bond, the investors receive a fixed predetermined rate of interest. Whenever an SGB issue is launched, investors can apply directly or through bank branches, post offices, SCHIL, or authorized stock exchanges. The bonds are limited to 500 grams and can only be purchased by Indian residents or entities.
Comparison of Gold Investments
Comparison of Gold Investments
|Gold Investment||Minimum Investment (approximate price)||Key Charges (Approx)|
|Physical Gold||Rs 6,000 for a minimum 1 gm of gold|| |
|Digital Gold||Rs 5,000 for a minimum 1 gm of gold|| |
|Gold ETF||Rs 5,000|| |
|Gold Mutual Funds||Starting at Rs 100|| |
|Sovereign Gold Bonds||Rs 5,000|| |
Physical gold and digital gold investments are not recommended due to the various risks involved as well as the significantly high buy-sell spreads. If you plan to invest for a period of 5 years or longer, Sovereign Gold Bonds are the best option. Finally, these bonds are tax-free when redeemed at maturity, which is after eight years. If you only want to invest in gold for a short period of time, say less than three years, you can use Gold Mutual Funds or Gold ETFs, which have a lot of liquidity and availability.