As Gold is treated as save haven by Indians, Purchasing Gold occasionally is common thing we notice in India. Though Gold is purchased “Traditionally”(in the form of the ornaments, gold bars)in olden days, due to resurgence of technology various “Investment Options” were introduced to invest in gold
Various Ways to invest in Gold-
1.Traditional Gold– This would be purchased in “Physical Form” in the form of Gold Biscuits, Bars and Ornaments. This are subject to additional VAT and Making charges beyond the “Actual Market Price”
2.Sovereign Gold Bonds– These are backed under Government security by offering 2.5% Guaranteed Interest. The price of the sovereign bonds is predeterminely fixed by the Government at the issue of the Sovereign Gold Bonds . These have maturity period of 8 Years but can be encashed in secondary market; at lower rate before 5 Years of the maturity period
3.Gold ETF’s- These are traded at the stock market where one has to need “Demat” a/c to invest in Gold ETF’s. They are traded at the availing market price at that moment where one can grab the “Current Traded Price” as per his wish.
4.Gold Mutual Funds– This are also a part of investing in gold but in mutual fund “units“. Units will be allotted at the applicable NAV and on the invested amount
Both “Gold ETF’s and Gold Mutual Funds” are a part of digital gold. They are in the form of Paper Gold rather than in Physical Gold Form
While Traditional gold and sovereign gold bonds are safe avenues; They are subject to additional charges when you sell.
Gold ETF’s and Gold Mutual Funds are digital assets and they can be sold at the existing market price without any charges.
So depending on your goals, you may choose any one of the above and invest in “Gold” as per your wish.