How to invest in Gold? Gold has traditionally been a favorite investment vehicle for Indians and not knowing the various channels available, and the one that is best suited for them costs people dearly. In this article, we will explore various investment options for gold and find the one that is best suited for you.

How to invest in gold in India?

There are various methods for investing in Gold in India. However, many people, at least retail investors still prefer the age-old method of buying jewellery either from their trusted jeweller or from big names like Tanishq. This becomes their undoing as they incur huge costs that could have been saved if their purpose was to invest in Gold.

So let’s explore the various options to invest in gold in India

Buy ornaments from jewellery shops

As mentioned above, this is by far the most used method to buy gold in India. Housewives reason that gold jewellery provides them the comfort of security since that is controlled by them unlike money or other financial instruments. To be fair, this actually does come to some people’s rescue in trying times when other options are closed.

However, this method attracts a hefty making charge. Generally starting from about 5%, this can go as high as 40% or even more in highly designed jewellery. Losing around 20% at the start of investment is like a gut-shot and would probably take years of growth to recover. Hence this method is not advised just for investment’s sake.

Another problem is that you don’t know the purity of the item you buy. In most cases where the buyer is uninformed, either the purity is questionable or the rates are high for the purity mentioned. For example, the shop might charge a 24-carat rate for 18-carat purity. These issues come to light at the time of selling which happens after decades if at all, at which time the investor faces loss.

On the other hand, if increasing the social and not the financial capital the primary purpose then by all means deck yourselves with beautiful designer sets. The alternative (diamonds) are even worse for your portfolio – won’t comment anything about the look though.

Gold Saving Schemes from Jewellers

Another form of investment that is popular in tier 2 and tier 3 cities is of saving some money with a jeweller on a monthly basis (or some other periodical fashion). At the end of the saving period, the investor can buy jewellery from the jeweller. The jeweller may also add some bonus amount depending on the scheme or the item you buy.

There are some apparent risks associated with this – the first and foremost is the credit risk of the jeweller. There have been instances where the jewellers shut shop and people have lost their hard-earned money.

Secondly, if there is no bonus amount, interest is lost that the money could have earned in a better investment instrument. If there is a bonus amount, then also there is an issue that the making charge might be high which might cover bonuses, profits and more!

Thirdly, since the exit might be through taking jewellery from that jeweller there is obvious liquidity risk which might be a big issue with the kind of families that do invest in these schemes.

Overall, I believe that it is better to stay away from such schemes.

Recommended Read: Investment: What Is Important – Risk Or Return? What Else?

Buy coins and bars

If having physical possession an absolute necessity, buying coins and bars is a much better investment option than buying jewellery. This is because, while the making charges are present in this also, they are negligible as compared to the charges in ornaments, especially if the quantity is large.

Secondly, since there are comparatively very lesser making charges, coins and bars can be bought from big brands. This reduces the chances of the issue of purity or cheating in any other way. These can also be purchased from banks which would further reduce these issues.

One issue in both these forms however is the handling cost. You might have to take some sort of security measures to safeguard your belongings against theft. This would reduce the return you get.

Gold ETFs

ETF is the short form for exchange-traded funds. These are open-ended funds and you can buy and sell them on the stock market. The fund managers for this track gold prices and invest in 99.5% purity gold for a major percentage of the fund value, and the balance is invested in debt. Hence, investment in these funds means taking a position on gold.

Investing in gold ETFs requires a Demat account that may be chargeable, basis the platform, and also has some expense ratio (annual maintenance charge) which might be 0.5% to 1%. There are some funds that may have even lower expense ratios. Also, there might be some commissions on buying and selling basis the broker you use.

There are some startups like Upstox that offer free Demat and trading accounts plus some other benefits which users can avail of by registering till these companies are on a growth path.

Hence, if you want to invest thinking that prices might increase in the future and don’t bother about the physical possession, this might be one of the ways. The minimum investment is for 1gm of gold.

Gold Funds

These are essentially mutual funds that invest in Gold ETFs and other related assets. This does not require a Demat account but the charges are higher compared to ETFs. This is because the charge for ETF in which these funds invest is there and then there is an additional charge for the mutual fund itself.

These are also less liquid since unlike ETFs these are not traded on the exchange and also carry an exit load which may be for withdrawal under a year. The minimum investment amount is generally Rs1000.

From an investment point of view, if you know what you are doing and already hold a Demat account, I believe that ETFs would be better than mutual funds.

Digital Gold

Nowadays startups have started offering digital gold in which you can invest at market prices in digital gold from Re 1. These startups have an association with either gold manufacturers or traders. There is an option to take back value or physical delivery. Physical delivery might have a constraint of minimum weight and would attract making and delivery charges.

Sovereign Gold Bonds

The government of India has come up with the Sovereign Gold Bond Scheme in which an investor can buy gold bonds of 8 years of maturity. These can be exited in the 5th, 6th, or 7th year also. Some important aspects of the scheme are:

  • You can get some discount by choosing the online option of investing
  • You get a 2.5% annual interest – paid semiannually – TDS at source is not deducted
  • Returns are tax-free if held to maturity
  • These are traded in the market – however, might trade at discount because of lower liquidity
  • Individuals can buy from 1gm to 4kg annually

Tip: Investors can compare the fresh issue and those being traded in the market and choose the one that gives the best ROI.

Final Words

Having gold jewellery is probably the first thing that you would buy because it would serve a dual purpose. However, just for investment purpose jewellery is a very bad option because of the loss in making charges and other issues discussed above. Saving schemes with jewellers is best to be avoided.

In a world going digital, physical possession should be best avoided because of the carrying costs and making charges. For long term investment, I believe that the government sovereign gold bond scheme is particularly good as it has tax benefits and a 2.5% income. However, for the short term, Gold ETFs may be a good option.

Categories: Investment

Ravi Maheshwari

Ravi is an IIM ranker with over 9 years of work experience and has helped optimize the financial performance of companies like BPCL, Sun, Ola, Swiggy, and Curefit. In this blog, he explains how to improve personal finance and also gives insights into financial models of companies.

443 Comments

스포츠분석 · May 11, 2021 at 06:08

up to date with coming near near post. Thank you one million and please continue the enjoyable work.

정품비아그라 · May 11, 2021 at 06:12

Very interesting details you have mentioned , appreciate it for putting up. “I don’t know what you could say about a day in which you have seen four beautiful sunsets.” by John Glenn.

스포츠픽 · May 11, 2021 at 06:13

Tremendous things here. I am very glad to see your post.

해외스포츠중계사이트 · May 11, 2021 at 06:13

up to date with forthcoming post. Thanks a

자이데나구입방법 · May 11, 2021 at 06:21

Very nice content posted by the author. I appreciate your effort to share this kind of useful information. Keep writing and best of luck for your upcoming posts and future. buy instagram followers cheap 10k

구구정구매 · May 11, 2021 at 06:22

Very nice post. I certainly love this site. Keep writing!

소액결제현금화 · May 11, 2021 at 06:31

Very good info. Lucky me I found your website by accident (stumbleupon). I’ve saved as a favorite for later!

가방레플리카 · May 11, 2021 at 06:32

used to pay a quick visit this blog daily.

여성레플리카 · May 11, 2021 at 06:33

Today, I went to the beachfront with my kids. I found a sea shell and gave it to my 4 year old daughter and said “You can hear the ocean if you put this to your ear.” She put

명품레플리카 · May 11, 2021 at 06:34

useful

문화상품권현금화 · May 11, 2021 at 06:36

Very good site you have here but I was curious about if you knew of any discussion boards that cover

문화상품권현금화 · May 11, 2021 at 06:37

Very good site you have here but I was curious about if you knew of any discussion boards that cover

자이데나구입방법 · May 11, 2021 at 06:40

valuable data concerning my study and knowledge.

정품비아그라 · May 11, 2021 at 06:42

up the good work!

가방레플리카 · May 11, 2021 at 06:49

Very great post. I just stumbled upon your blog and wished to say that I have

소액결제정책 · May 11, 2021 at 06:50

usually lost just trying to figure out how to begin. Any ideas

스포츠분석 · May 11, 2021 at 06:51

Usually I don’t learn post on blogs, however I wish to say that this write-up very pressured me to take a look at and do it! Your writing taste has been surprised me. Thanks, very nice post.

kyrie 5 spongebob · May 11, 2021 at 14:48

My wife and i got fortunate when Raymond managed to deal with his survey from the ideas he got from your own weblog. It is now and again perplexing to just be releasing secrets and techniques that many other folks might have been selling. And now we take into account we have you to appreciate for this. Those explanations you’ve made, the simple web site menu, the relationships you make it possible to foster – it’s got everything impressive, and it is making our son in addition to us know that this concept is cool, which is certainly seriously important. Thanks for everything!

golden goose · May 11, 2021 at 14:49

I would like to express my thanks to you just for rescuing me from this type of issue. Right after researching through the the web and meeting solutions that were not productive, I assumed my entire life was gone. Existing devoid of the answers to the difficulties you have solved all through the site is a crucial case, as well as ones that would have adversely affected my entire career if I hadn’t come across your web blog. Your good ability and kindness in controlling almost everything was tremendous. I am not sure what I would’ve done if I hadn’t come upon such a step like this. I can now look forward to my future. Thanks so much for the impressive and sensible guide. I won’t think twice to propose the blog to anyone who should receive support on this area.

jordan 6 · May 13, 2021 at 11:03

I and also my pals happened to be viewing the best guides located on your site then instantly I had an awful feeling I had not thanked the web site owner for those techniques. Those men happened to be for that reason passionate to learn all of them and have in effect in truth been enjoying these things. Appreciate your actually being considerably thoughtful and then for pick out this sort of notable information millions of individuals are really desperate to discover. My personal honest apologies for not expressing gratitude to you earlier.

supreme clothing · May 13, 2021 at 11:03

Thank you so much for giving everyone a very marvellous chance to read critical reviews from this web site. It is usually so pleasing and as well , full of fun for me personally and my office fellow workers to search your website at a minimum three times per week to study the new stuff you will have. And indeed, I’m also certainly fulfilled considering the excellent advice you give. Selected 4 ideas on this page are in reality the finest I have ever had.

giannis shoes · May 13, 2021 at 11:03

Thanks a lot for providing individuals with a very wonderful chance to read from here. It is always very superb and as well , packed with fun for me and my office friends to visit your blog on the least 3 times in a week to study the fresh tips you have. And lastly, I am just certainly fascinated with your astonishing tactics served by you. Certain 3 areas in this post are without a doubt the most beneficial I’ve had.

EvaUnita · May 13, 2021 at 13:32

[url=http://tadalafilicialis.com/]generic cialis daily canada[/url]

paul george · May 15, 2021 at 05:09

I wanted to create you that bit of observation to thank you very much over again regarding the precious tricks you’ve shared on this page. It is simply tremendously generous of you to make freely just what many of us would’ve advertised as an ebook to help with making some dough for themselves, most notably since you could possibly have tried it in case you wanted. These suggestions as well worked like the easy way to understand that most people have similar zeal much like my own to know a good deal more regarding this matter. I’m certain there are several more fun moments ahead for folks who check out your blog post.

lebron james shoes · May 15, 2021 at 05:09

I’m writing to make you understand of the terrific experience my friend’s girl had using your web site. She discovered numerous things, not to mention what it is like to possess an awesome helping mindset to make other folks very easily know just exactly selected complex subject matter. You really surpassed her desires. Thanks for coming up with the warm and helpful, healthy, educational not to mention unique tips on that topic to Kate.

curry 6 · May 15, 2021 at 05:10

I have to express appreciation to you just for bailing me out of this particular crisis. Right after exploring through the online world and getting solutions which were not powerful, I assumed my life was well over. Living minus the answers to the issues you have solved by way of your good write-up is a crucial case, as well as ones which might have in a negative way damaged my career if I had not discovered your website. Your training and kindness in taking care of all the pieces was very useful. I don’t know what I would’ve done if I hadn’t discovered such a stuff like this. I’m able to at this point relish my future. Thanks a lot very much for the reliable and sensible guide. I won’t hesitate to refer the website to anybody who would like guidelines on this problem.

Shelldownload.org · May 16, 2021 at 16:24

There’s definately a lot to find out about this subject.
I like all of the points you have made.

golden goose shoes · May 16, 2021 at 22:11

I not to mention my guys were checking out the excellent recommendations found on your web site and all of a sudden came up with an awful feeling I had not expressed respect to the site owner for those tips. All of the young boys had been as a consequence thrilled to read through all of them and already have quite simply been taking pleasure in these things. Appreciate your simply being simply considerate and then for picking out some perfect information most people are really desperate to discover. My honest apologies for not saying thanks to sooner.

kyrie 7 · May 16, 2021 at 22:11

I’m just commenting to make you know of the notable discovery my child encountered browsing your site. She realized plenty of issues, with the inclusion of how it is like to have an incredible giving nature to let other folks with ease have an understanding of certain impossible matters. You truly surpassed her desires. Many thanks for showing these essential, healthy, educational and as well as easy thoughts on that topic to Tanya.

adidas yeezy · May 16, 2021 at 22:12

My wife and i felt joyful when John managed to deal with his reports through the precious recommendations he grabbed through your site. It is now and again perplexing to simply happen to be making a gift of guides which men and women may have been selling. We understand we now have the blog owner to appreciate for that. The most important explanations you’ve made, the simple site menu, the friendships you can assist to promote – it’s got most spectacular, and it’s helping our son in addition to the family understand that matter is entertaining, which is very indispensable. Thanks for everything!

supreme clothing · May 18, 2021 at 12:33

I simply wished to thank you so much once more. I’m not certain the things I would have made to happen without the actual techniques provided by you over my concern. It absolutely was the challenging problem in my circumstances, however , looking at this skilled mode you dealt with that took me to leap over delight. I will be happier for the service as well as believe you recognize what a powerful job you are always providing training men and women by way of your webpage. I know that you have never got to know any of us.

golden goose outlet · May 18, 2021 at 12:33

My spouse and i ended up being really ecstatic Louis managed to finish off his researching through the entire ideas he gained out of the blog. It’s not at all simplistic to just find yourself offering helpful tips which some other people have been making money from. And we all fully understand we have got the blog owner to be grateful to for that. Those explanations you made, the straightforward web site navigation, the friendships your site help create – it is everything great, and it is aiding our son in addition to the family know that the theme is enjoyable, which is certainly extremely mandatory. Thanks for the whole thing!

bape · May 18, 2021 at 12:33

My husband and i have been quite joyous when Chris managed to carry out his inquiry via the ideas he got out of the blog. It is now and again perplexing just to be giving for free facts that a number of people have been making money from. We fully grasp we need the blog owner to give thanks to for this. The type of illustrations you’ve made, the simple web site navigation, the friendships you will make it possible to foster – it is many powerful, and it is facilitating our son in addition to our family imagine that this subject matter is exciting, which is truly fundamental. Many thanks for everything!

JimUnita · May 18, 2021 at 15:02

[url=https://100sildenafil.com/]sildenafil 20 mg price[/url] [url=https://buysildenafiltadalafil.com/]buy sildenafil online australia[/url] [url=https://prednisonemedicine.com/]prednisone brand name us[/url] [url=https://uvpharmacy.com/]canadian world pharmacy[/url] [url=https://tadalafiltbb.com/]female cialis uk[/url] [url=https://ivermectinxl.com/]where to buy ivermectin cream[/url]

소액결제 · May 19, 2021 at 08:46

I read this article fully regarding the resemblance of latest and preceding technologies, it’s remarkable
article.

Takipçi Satın AL · May 20, 2021 at 04:29

you’re in reality a good webmaster. The site loading
pace is incredible. It kind of feels that you are doing any unique
trick. Moreover, The contents are masterwork. you have done a magnificent activity in this topic!

golden goose · May 20, 2021 at 04:30

I want to express my appreciation to this writer for bailing me out of this type of scenario. Just after checking throughout the internet and getting methods that were not helpful, I thought my life was over. Existing without the solutions to the problems you have solved all through your entire article content is a critical case, and the ones which could have in a negative way damaged my career if I had not discovered the website. The training and kindness in playing with every part was very useful. I’m not sure what I would have done if I had not come upon such a solution like this. I can at this point relish my future. Thank you very much for your specialized and amazing guide. I won’t hesitate to refer your site to any person who would need care on this situation.

golden goose sneakers · May 20, 2021 at 04:31

I wish to show thanks to you just for bailing me out of this situation. Just after scouting throughout the world-wide-web and getting strategies which were not beneficial, I assumed my entire life was well over. Existing without the strategies to the issues you’ve solved by means of your good site is a crucial case, and the ones which might have negatively damaged my career if I hadn’t come across your blog post. Your primary skills and kindness in taking care of every item was invaluable. I’m not sure what I would have done if I had not discovered such a thing like this. I can at this point look forward to my future. Thank you very much for your expert and sensible help. I won’t think twice to recommend your web site to any individual who needs and wants guidelines about this problem.

MiaUnita · May 21, 2021 at 21:09

[url=https://cialisntab.com/]cialis 40 mg price[/url] [url=https://sildenafilmstore.com/]cost of sildenafil 100mg tablets[/url] [url=https://albuterolnorx.com/]ventolin 500 mcg[/url] [url=https://cialisctab.com/]cialis chew or swallow[/url] [url=https://ivermectinxl.com/]stromectol price us[/url]

steph curry shoes · May 21, 2021 at 21:14

I simply wanted to post a quick comment in order to thank you for all of the pleasant hints you are giving at this site. My prolonged internet investigation has now been rewarded with incredibly good know-how to talk about with my colleagues. I ‘d assume that many of us readers actually are quite endowed to live in a great place with so many wonderful people with valuable advice. I feel quite grateful to have seen your web pages and look forward to really more awesome moments reading here. Thanks once again for a lot of things.

kyrie 7 shoes · May 21, 2021 at 21:14

I would like to voice my passion for your kind-heartedness for men and women that have the need for assistance with that question. Your very own commitment to getting the solution across appeared to be quite significant and has consistently permitted guys and women just like me to get to their ambitions. The valuable tips and hints implies this much to me and especially to my mates. Regards; from each one of us.

longchamp · May 21, 2021 at 21:15

A lot of thanks for all your hard work on this site. My daughter delights in conducting research and it is easy to understand why. A lot of people learn all concerning the compelling manner you present helpful information via this web site and in addition strongly encourage response from others on that point while our own daughter is actually learning a whole lot. Have fun with the remaining portion of the new year. You are doing a tremendous job.

NickUnita · May 23, 2021 at 10:53

[url=http://tadalafilntab.com/]brand cialis canada[/url] [url=http://cialismtab.com/]tadalafil 80mg[/url]

curry 7 sour patch · May 23, 2021 at 13:22

I precisely desired to thank you very much all over again. I am not sure the things I might have tried without the actual advice discussed by you over such a problem. It previously was a horrifying matter in my opinion, however , looking at a new expert style you resolved the issue forced me to cry with joy. Extremely happier for this advice and even expect you comprehend what a powerful job you have been doing educating most people by way of your websites. I know that you’ve never met any of us.

supreme clothing · May 23, 2021 at 13:22

I have to express my respect for your generosity supporting individuals that must have assistance with the concept. Your personal commitment to passing the solution along became exceedingly advantageous and has in most cases allowed folks much like me to arrive at their dreams. This important key points can mean a lot to me and substantially more to my peers. Many thanks; from all of us.

hermes birkin · May 23, 2021 at 13:27

I just wanted to type a quick comment to be able to appreciate you for the unique advice you are placing on this site. My time consuming internet search has now been compensated with beneficial tips to go over with my best friends. I ‘d suppose that many of us website visitors are quite lucky to dwell in a useful site with very many awesome professionals with very helpful tips and hints. I feel rather blessed to have come across your web page and look forward to tons of more exciting moments reading here. Thanks again for a lot of things.

curry shoes · May 23, 2021 at 13:28

I truly wanted to type a quick word to be able to thank you for these fantastic steps you are writing at this website. My prolonged internet lookup has now been recognized with good content to exchange with my great friends. I ‘d assume that most of us readers actually are undoubtedly blessed to dwell in a great website with so many lovely individuals with very beneficial pointers. I feel really lucky to have used your entire web site and look forward to tons of more exciting moments reading here. Thanks once more for a lot of things.

ucuz takipçi satın al · May 23, 2021 at 22:59

Thanks on your marvelous posting! I truly enjoyed reading
it, you may be a great author.I will make certain to bookmark your blog and may come back
down the road. I want to encourage one to continue your great job, have
a nice afternoon!

curry shoes · May 25, 2021 at 07:10

I truly wanted to construct a brief remark to be able to express gratitude to you for some of the pleasant pointers you are giving out on this site. My incredibly long internet lookup has finally been honored with high-quality facts to go over with my family members. I ‘d point out that we site visitors are undeniably fortunate to live in a remarkable website with so many brilliant individuals with insightful secrets. I feel really privileged to have used your entire weblog and look forward to really more fun minutes reading here. Thanks a lot once again for everything.

golden goose · May 25, 2021 at 07:11

My spouse and i were more than happy Jordan managed to deal with his investigations with the ideas he received using your web page. It’s not at all simplistic just to be giving away tips which usually the others could have been selling. And now we acknowledge we’ve got the website owner to thank because of that. The illustrations you made, the straightforward blog navigation, the relationships you help to promote – it is everything spectacular, and it is making our son in addition to us understand that idea is brilliant, and that’s extremely vital. Thanks for the whole lot!

Leave a Reply

Your email address will not be published. Required fields are marked *