Introduction on Best Ways to Invest in Gold: Hello folks, are you ready for great investment in gold? Well, then you landed in right place. Gold investment is the safest investment ever as we know the prices are going high. But for Indians, gold has a great value than just an investment option; and when emotion comes into play, it is very essential to be extra careful while having that commodity because one must be vigilant about its risks, along with the associated advantages.
It becomes even more vital in the case of gold since gold can be preserved in two ways:
- It can be as investment or
- As personal use.
A guide to best ways to invest in gold, how to invest in gold, types of gold investments, and profit in gold investements
Gold can now be purchased and invested in numerous forms: physical gold, gold bonds, digital gold, gold ETFs (exchange-traded funds), and others. Investment in gold online is a diverse ballgame. Let’s check out the various forms in which one can own gold. Now let us get into the details of types of gold investements for great profits.
Digital gold can be purchased on different digital platforms in various fintech start-ups.
Digital gold investment can be done from Re 1 as well. Such platforms usually have an association with gold traders or manufacturers such as the Augmont. You can do transactions in gold on live market prices and avail back it whenever you desire.
You can even plan to get your money value or have it delivered physically. However, be cautious while using the platform while spending on digital gold. Not all platforms will offer to get physical gold. Digital gold is thus one of the best ways for investment purposes.
One can go for purchasing gold jewelry from jewelers but planning on gold jewelry as an investment idea is no more an expensive project nowadays.
One of the main risks of having gold jewelry is its making charges. When you go for investment purposes, while selling it back you may not have your making charges. Your returns might get diminished based on-metal performance. The making costs might differ between 5-23% based on jewelry type. The only benefit of jewelry is you will have the physical jewelry and those who love touch and feel will simply opt for this option only.
Coins and Bars
Coins and bars may do not have the ‘usage’ value. Instead, that has made charges as well but lower when compared to jewelry. They are lower than a thousand rupees in several scenarios. Both coins/bars and jewelry pose a problem of physical damage or robbery.
Sovereign gold bonds were initiated by the Government of India in the year 2015. The sale of such bonds is monitored by RBI. It was launched by the government as a substitute for owning physical gold.
This is a well-organized way of keeping gold as an investment possibility. These bonds have around eight years including a lock-in period of 5 years.
Bonds are backed by gold and are redeemed in cash mainly. Investors are not charged any extra fees for this fund management.
Gold ETFs are generally exchange-traded funds that will be invested in gold. It’s stock market-based trading. ETFs carry Demat account costs which can start from zero to about Rs 3,000 based on the broker. All mutual funds carry expense ratios and the expense ratio for ETFs is generally in the range of 0.5 to 1%.
Gold Fund of Funds (FOFs)
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Fund of funds is the common mutual funds that will be invested in other mutual funds. They pose a higher risk are very much costly.
Gold Savings Schemes
Gold savings schemes are schemes operated by several jewelers. In such plans, you have to spend money with any of your desirable jewelers on a term basis (commonly monthly).
After the scheme will attain the maturity period, you can purchase gold from that jeweler for the amount you have spent by saving monthly with them. It is obvious that the jeweler has the bonus inclusion option to the amount and gives you the jewelry with the total amount.
Many people do plan such schemes for investing their savings in gold but this option has some risks. At times, the jeweler might shut his shop after he has collected entire money from his clients. This happens if a proper background check is not done about the jeweler so one must be careful while investing or identifying such a jeweler. Making charges are most of the time could vary from 6-35% and the charges could sometimes cross the bonus amount included by the jeweler and you will not get satisfying returns of the yearlong (scheme period) savings.
In case you have thoroughly read this article till here, you will get some awareness that there are several ways to access gold.
Apart from these gold investment ideas, Gold ETFs, Digital gold, and sovereign gold bonds are a few more options about how to invest in gold online for initial saving plans but all of them have different goals.
When you are seeking a risk-free investment, sovereign gold bonds will be the best choice as they will provide around a 2.5% fixed rate of interest.
Digital gold is connected with the live commodity price. Your returns will reach a higher/lower amount than the interest offered on SGBs based on how the commodity market is following.
Speaking regarding online modes, digital gold offers you to keep physical gold at the last (based on the platform you choose) or have the monetary value at the last. In case you have determined you don’t want physical gold; you can just opt to avail the redemption value when close to the maturity period.
Gold bonds, ETFs, and Gold funds will inform you of the commodity’s market performance. If one is choosing these options, he/she must check thoroughly that they are not expecting physical delivery of gold on maturity/redemption.
Conclusion of best ways to invest in gold
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Concerning rate all forms of gold differs. Sovereign Gold Bonds do not impose any charges. The charges for gold ETFs and gold fund of funds are laid by SEBI (Securities and Exchange Board of India).
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