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April 26, 2022

What are the Different Ways of Investing in Gold?

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Generally, our elders buy gold from jewelry stores but now the dynamics of investing in gold have changed. You don’t need to buy gold in a physical state and keep worrying about it. I will share some different options here to invest in gold makes easy.

Option 1. Gold Jewelry:

We love to wear gold jewelry and show off. On all family gatherings or cultural festivals.

It’s part of our integral life but the safety of it is a big concern and it also includes making charges and when you won’t make changes again some depreciation and remaking charges.

It only serves the purpose of appreciating value over the long run when you needed the most. 

 Option 2. Gold coins / Bars:

 People buy gold coins and bars just to keep them as safe investment. Up to an extent it is good to have physical gold in small-size coins and bars so that you can exchange it when needed but again security is a concern and appreciated value can only be realized during liquidation.

Option 3. Saving Schemes/EMI/Kitty Gold schemes – 

From last 10-15 years jewelers have started attracting customers by offering multiple options of buying gold by accumulating money in a kitty.
Also, offering discounts for regular buyers / or by offering one free EMI / current price option for buying jewelry after a year or buy offering bonus of 1/10 gm to 1 gm on buying 10gm to 100 gm of gold. Also, by waiving off making charges.

Option 4 Digital Gold

Digital Gold is genuine and 24K 99.5% pure gold is backed by physical gold. Your purchase is stored safely and is also 100% insured.

You can exchange digital gold for physical jewelry or gold coins and bullion. You can buy infractions (as low as ₹10) and keep accumulating as and when the price goes lower. It is linked with real-time gold prices.

Benefits of Digital Gold

  • Easy access- not like bank lockers you need a specific time to check on your gold, you can check and gaze at the performance of your investment any time online.
  • No Liquidation issue- you can Ancash it as and when required.
  • Converting to the physical gold facility is also provided by most organizations.
  • Invest small amounts – You don’t have to invest a big chunk of your savings on it you can even start with ₹10 and keep adding. So, start any time.
  • Maximum security –Your purchase is stored safely and it’s the responsibility of the organization from which you are buying it. Which means it is 100% insured.

Option 5. Gold Sovereign Bonds

Sovereign Gold Bonds, substitutes for holding physical gold, issued by the (RBI), Reserve bank of India are government securities denominated in grams of gold.

Investors have to pay the issue price in cash in return you get the safest way of digital gold and the bonds will be redeemed in cash on maturity. SGB has an assured interest of 2.50% per annum. The bonds have a lock-in period of 5 years and an overall tenure of 8 years.

Option 6. Gold Mutual Funds

One of the best ways to invest in digital gold you purchase, you can invest as low as Rs 100 in Gold mutual funds, these fund managers invest in gold mining companies, gold reserves of the country, stocks of gold producing and distributing companies. Gold prices are usually, linked with these mutual funds’ performance.

Option 7. Gold Exchange Traded Funds (ETFs)

ETFs are generally trading the units in the stock market and have pros and cons of their own. A quick return can be expected from it though as it invests in the gold asset class.

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