Different ways to buy Gold for investment

There are a variety of gold forms to choose from for gold investment, even after the end of this festive season

The temptation and thrill of wearing gold jewellery are rarely paralleled, but you can now buy gold without taking the physical delivery of the yellow metal. The demand for physical gold forms like jewellery and coins continues strong, but the demand for non-physical forms of gold is also picking up. 

Gold has been an object of affection in Indian culture since time immemorial. But it has also doubled up as an investment instrument, particularly in times of need. Financial companies and gold traders have recognised this dual importance of gold. The non-physical gold forms are not for the physical use of gold, but they serve the purpose of gold as an investment perfectly.

So, when you set out to buy gold this festive season, make sure that you know all the forms of gold you can buy, and choose them as per your convenience.

1. Gold jewellery

To buy gold jewellery, you have to visit your preferred jeweller’s store. Many leading jewellery brands have their products listed on their web pages as well. While buying gold jewellery, you have to look into the purity of the gold. BIS certified gold is hallmarked for purity. You must also check the caratage of the gold and its purity percentage. Check the real-time price of gold while buying gold jewellery and negotiate with the jeweller on the making charge.

2. Gold bars

Rectangular pieces of gold come in all sizes, from small ingots of one gram to larger bars of a kilo and beyond. Gold bars are bought as investments, as well as during festive celebrations, anniversaries and wedding gifts. The making charges are much lower than jewellery, and one may ensure purity by buying hallmarked gold bars or ones with LMBA certification. It may be a safety concern to store gold bars at home, and lockers are the most preferred storage options.

3. Gold coins

Gold coins continue to remain popular as investment and saving options, carrying on their legacy as historical currencies. Well-known gold providers sell gold coins of 995 and above purity, but 22k gold is the most common. Generally available from 0.5 grams to 100 grams, coins between the weight of 1 to 8 grams (also known as guineas) are most popular. You can buy hallmarked gold coins from jewellers, their websites, e-commerce sites and even selected banks. Gold coins are small in size and therefore are a chosen option for regular savings in gold. The making charges are as minimal as their size, and are standardised.

4. Gold jewellery scheme

Jewellers offer gold jewellery schemes as an easy instalment-based option of buying gold. You can opt for one such scheme and pay a fixed amount every month for 11 months. The jeweller waives the payment of the 12th month and offers you to buy gold jewellery of your choice. The exact arrangement of the scheme, like the tenure of the scheme, the discount and other conditions may vary from jeweller to jeweller. It is a good way of accumulating gold jewellery proactively if you have a wedding in your family in the next few years.

5. Digital gold

If you don’t want or need to physically buy gold, but you are nevertheless keen to invest in gold, digital gold is perfect for you. Digital gold can be bought online, and the same gets stored in vaults on your behalf. You can buy digital gold on mobile e-wallet platforms like PayTm and GooglePay, bank websites, and other gold selling platforms. Augmont, MMTC-PAMP, and SafeGold are leading refineries and metal traders who provide the physical gold corresponding to each digital gold purchase. Investment can start with just one rupee, while the pricing is real-time and completely transparent. The purity is certified as 24k with a fineness of 995 and above.

6. Sovereign gold bonds

Sovereign gold bonds are bonds that are denominated in grams of gold and are issued by the Reserve Bank of India. Available in denominations like 5, 10, 50, 100 grams etc., a person can invest in SGB of a maximum denomination of 500 grams in a year. SGBs are released during a specific window and can be bought through banks and post offices. SGBs have a specified tenure of 5 to 7 years but can be traded in exchanges and liquidated easily.

7. Gold ETFs

Gold ETFs are exchange-traded funds that follow the domestic price of physical gold. A unit of gold ETF is equivalent to one gram of gold. Gold ETFs are backed by investment-grade physical gold of the best purity. You can invest in a gold ETF through your Demat and trading account. There is no entry or exit load on gold ETFs, and the gold prices are transparent and are updated in real-time.

8. Gold funds

Gold funds are mutual funds that invest in domestic as well as international gold. Gold funds may also invest in gold mining and distribution companies, as well as in gold ETFs. So, if you want to start a SIP investment in gold, gold funds are the ideal option. You can activate an auto-payment towards your gold SIP using your IDFC FIRST Bank Debit or Credit Card.

This festive season, don’t pre-decide to go the traditional way. Find out why you want gold, how to and how much you want to invest, and accordingly, choose a form of gold that best meets your gold investment goals. Track your investments with our online banking app.

Disclaimer

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