Gold Investment

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Gold is the metal which we Indians till now held in high esteem. Our craze for this precious metal is still unabated. Not only does it possess aesthetic and traditional values but also it has economic value. Besides adorning the wearer, gold serves as a future asset. From the past until the present, its value never decreases but only gradually increases. India is the world’s largest consumer of gold. From the ancient period itself, Indians regarded gold as a wonderful source of investment to meet financial emergencies as well as a symbol of prosperity and divine quality. If you are wondering why to invest in gold and what are the different options available to invest in gold, I’m pretty sure that this article will help you all.

Why to invest in Gold?

Money invested in gold never gets wasted. There are many reasons why you should buy gold. Let's see each one of them in detail.

Easy Exchange for Cash

Gold can be exchanged easily for money wherever you are in the world. That is why all are keen in buying and saving large amount of gold. At times of emergency, gold can be exchanged into cash much quicker than other assets. Using gold, one can also claim loan.

Protection from inflation

Though currency rate may decrease, gold rate remains unaffected during inflation. Gold withstands inflation and this is one of the main reasons to invest in gold.

Symbol of Wealth

From time immemorial, gold has been viewed as a symbol of wealth and prosperity. Investment in gold pass on from one generation to another generation and it is considered as future asset.

Movable Asset

When compared to real estate, investing in gold is much easier. It can be used both for adorning as well as a safe way of investment.

What are the different ways of owning Gold?

Gone are the days where people invest money in physical gold and safeguard them within lockers in home and bank. In this digital era where everything is digitalized, gold is not an exception. With digital gold, you can easily invest money on 24 Carat physical gold in online itself. Also, you are free from storage issues which is another added advantage. Let's see the different ways of owning gold - physical gold, digital gold and paper gold.

What is Physical Gold?

Physical gold is nothing but the gold which we buy from jewellers in jewellery shop. Physical gold is available in the form of jewels, coins and bars. Investing money on physical gold helps to combat financial crisis. While buying physical gold in the form of jewellery, we often have to pay extra charges in the name of making charges and wastage. Also, there are issues concerning safety and maintenance. To buy physical gold, we should have to wait for some time to save sufficient money.

What is Digital Gold?

Digital gold is an online mode of investing in physical gold. With digital gold, you can easily buy, sell and redeem 24 Carat 99.5% pure gold with just a click. You no need to visit jewellery shop to buy physical gold. You can easily buy it from your home itself and need not worry about its safety and purity. With digital gold, you can start your investment on gold from ₹1 onwards. Digital gold is offered by the vendors MMTC-PAMP India Pvt. Ltd, the largest Digital gold provider and Digital Gold India Pvt. Ltd. MMTC-PAMP has Stock Holding, Motilal Oswal, Paytm, GPay, PhonePe and HDFC Securities and Digital Gold India Pvt. Ltd. has Safegold as its distributors.

Digital Gold Investment Platforms

SafeGold

• Safe Gold is a digital platform where you can buy, sell and get 24K 99.5% pure gold by delivery.
• It is a product of Digital Gold India Pvt.Ltd. supported by institutions and venture capital. Also, World Gold Council owns a small stake in this company.
• Safe Gold has partnership with Brink's India which securely stores your gold in world-class vaults and IDBI Trustee which safely maintains your interest.
• It is a secure, transparent and convenient way to invest in gold.
• The minimum purchase starts from Rs.1.
• There is no lock-in period to buy and sell gold. Anytime, customers can seek delivery for their physical gold.
• The minimum quantity for delivery of physical gold starts from 0.5 gm.
• The physical gold will be delivered in the form of coins for which you need to pay delivery charge and making charge according to the coin's weight and design.
• Using gift option, you can gift gold by entering recipient’s mobile number and quantity of gold you wish to gift.
• The sell price quote will be available in the website itself.
• With Gold Savings Plan, customers can accumulate gold by selecting instalment amount for certain duration on monthly/weekly basis and use it later to buy jewels in Safe gold.
• The minimum instalment amount starts from Rs.100.

PhonePe

• PhonePe offers you to buy and sell digital gold of 24K 99.5% in partnership with SafeGold.
• You can start buying gold from Rs.1.
• The price of gold is linked with the gold price in the commercial bullion market. You can buy and sell gold according to the live gold price in the market which are updated every few minutes.
• The gold which you buy are safely guarded in vaults offered by Brink’s. It is completely insured.
• The gold can be kept in vault for a maximum period of 7 years.
• The accumulated gold can be redeemed in the form of gold coins. The minimum quantity for taking delivery of physical gold is 5 grams.
• Delivery charge and minting charges are applied. After two years, storage charges are applied if you don’t buy above 2 grams. Transaction charges will also be applied while selling gold.
• You need to pay 3% GST while purchasing gold.

Gold Rush

• Gold Rush is offered by Stock Holding Corporation of India in association with MMTC-PAMP.
• Gold rush is a Gold Accumulation Plan in which you can buy gold at minimum Rs.100.
• There is no lock-in period and you can withdraw minimum 1 gram of gold.
• The gold prices are taken from London Bullion Market Association (LBMA) and are updated on daily basis.
• The gold bought are securely stored in MMTC vaults and these vaults are completely insured.
• You can purchase anytime round the clock.
• The minimum quantity for delivery of physical gold starts from one gram.
• There is no registration fee, storage fee or management fee.
• However, when you want your gold to be delivered in coins, you need to pay making and delivery charges.
• You can keep your gold in vault only for a period of 5 years. The purity of gold is 24K 999.99.

Paytm

• Paytm offers online gold-buying platform "Digital Gold" which helps customers to purchase 24K 999.99 pure gold.
• Paytm's "Digital Gold" is offered by MMTC-PAMP.
• Customers can buy gold from minimum Rs.1.
• The gold bought are safely stored in MMTC-PAMP vaults and are fully insured. There are no storage fee.
• You can either sell your accumulated gold to MMTC-PAMP or redeem in the form of coins by delivery.
• While redeeming gold in the form of coins, you need to pay making and delivery charges. The making charges will be applied depending on the coin's weight and design.
• The minimum quantity for delivery of physical gold starts from one gram.
• With Paytm, you can buy, sell and withdraw gold from anywhere and at any time at live rate.
• The gold prices are derived from London Bullion Market Association (LBMA) and updated on regular basis.
• The maximum time period for storage of gold in vault is 5 years.

Google Pay

• Google Pay offers customers to buy and accumulate gold digitally from MMTC-PAMP under "Gold Vault". It offers 24 K 99.99% pure gold.
• The gold which you buy gets stored in Gold Accumulation Plan (GAP) and it is completely protected in MMTC-PAMP vaults.
• The gold under security are insured 100%. The minimum purchase amount for gold starts from Rs.1.
• The gold price is updated every few minutes so that you can buy and sell gold from anywhere and at any time at latest price.
• Gold Vault provides a clear representation of all your gold transactions.
• The account is linked to your mobile number and it will alert you whenever any suspicious activity is found.
• You can physically redeem your gold by delivery and the minimum quantity starts from one gram.
• Also, you are provided with the option to select legal heir for your gold and their identity will be duly authenticated.
• At the time of redemption, additional charges will be levied for storage. You need to pay making and delivery charges while redeeming gold coins.

Which Digital Gold Investment Platform is Best?

What is Paper Gold?

Paper gold is a piece of paper which acts as a substitute for physical gold. You can buy paper gold in the form of Sovereign Gold Bonds, Gold Exchange Traded Funds and Gold mutual funds.

Sovereign Gold Bonds

Sovereign Gold Bonds are government securities provided in grams of gold where you need to pay in cash. The bond is issued by the Reserve Bank of India. At the time of maturity, the bonds will be redeemed in cash based on simple average of closing price three days prior from repayment as published by the Jewellers Association Limited and India Bullion. It provides 2.5% fixed interest.

Gold Exchange Traded Funds

Gold ETFs are units of gold in paper or demat form. One Gold ETF unit is equal to one gram of gold.You can buy and sell Gold ETFs at stock market via broker with the use of trading account and demat account. There is no wealth tax, VAT, security transaction tax and sales tax. You need to pay expense ratio ranging from 0.9-1%.

Gold Mutual Funds

Gold Mutual Fund is an option to invest money on gold. Gold ETF is an underlying asset in gold mutual fund where the expense ratio is higher than gold ETF. In order to manage your mutual fund, you need to pay expense ratio to the company.

Difference between Physical gold, Digital Gold and Paper Gold