Here are the best ways to buy gold on Akshaya Tritiya

Akha Teej, or Akshaya Tritiya, is an auspicious day celebrated by Hindus and Jains in India and Nepal. Traditionally, it falls on the third day of the Hindu month Vaishakha (April-May). Akshaya means "eternal" or "never diminishing," and Ritiya means "the third day." A gold purchase on this occasion is thought to bring prosperity, success, and good fortune. 

The time to invest in gold has never been better. To get started, let's examine the benefits of investing in gold.

Why invest in gold: Significant advantages

Gold has been considered a safe investment for centuries, offering several benefits to investors. The following are the most significant ones.

1. Hedge against inflation

Historically, gold has been used to hedge against inflation. When there is high inflation, currencies lose value, but commodities such as gold rise.

2. Diversification

The price of gold tends to move independently of other asset classes such as bonds and stocks, so holding gold reduces investment risk as well.

3. Liquidity

In case you need urgent cash, you can liquidate your gold investment quickly. Gold is a highly liquid asset that is easy to buy and sell.

4. Store of value

In contrast to currencies, gold has maintained its value over the years.

Different ways to invest in gold this Akshaya Tritiya

Now that we have explored the advantages of investing in gold, let’s understand how to invest in gold this Akshaya Tritiya:

Physical gold

If you wish to invest in gold the traditional route, this is ideal. You can buy physical gold in the form of coins, jewellery, or bars. While buying gold on Akshaya Tritiya, it is vital to check its purity and jewellery/item-making charges. While gold jewellery is more expensive, coins and bars are more suitable investments due to their lower making charges and ease of storage.

Gold ETFs

Gold Exchange Traded Funds (ETFs) are another way to invest in gold. Gold ETFs are traded on the stock exchange and are backed by physical gold. Buying gold ETFs allows investing without the hassle of storage. It also offers the advantage of liquidity, as they can be bought and sold on the stock exchange like any other stock. However, investors must pay brokerage fees and other charges while buying and selling gold ETFs.

Digital gold

If you want to know how to invest in gold online, digital platforms are ideal. Various companies offer digital gold that you can buy in small denominations, starting from as low as Re. 1. It is backed by physical gold and is stored in a secure vault. Digital gold offers the convenience of buying and selling gold without storage concerns. However, investors must know the relevant fees while transacting.

Gold mutual funds

Gold mutual funds invest in gold mining, refining, or trading companies. They are a suitable investment option if you want to invest in gold indirectly. Gold mutual funds offer the advantage of diversification as they invest in multiple gold-related companies. However, investors must know the risks of investing in mutual funds.

Gold futures

Gold futures are contracts to buy or sell a certain gold quantity with a predetermined value on a specific date in the future. Futures trading is done on the commodity exchange, and investors can participate by paying a small margin. Gold futures offer the advantage of leverage, as investors can control a large amount of gold with a small investment. However, futures trading involves high risk, and investors must know about the potential losses.

Sovereign gold bonds
 

Sovereign Gold Bonds or SGBs are government securities for gold denominated in grams. SGBs are issued by the Reserve Bank of India on behalf of the government and can be bought by individuals, HUFs, trusts, and universities. SGBs offer an attractive alternative to physical gold, providing an interest income of 2.5% per annum on the investment amount. SGBs also offer the advantage of capital gains tax exemption on redemption, making them a tax-efficient investment option.

How to invest in gold bonds

Applying for Sovereign Gold Bonds (SGBs) online is also possible using IDFC FIRST Bank's SGB offering. The minimum value that can be invested is one gram, while the maximum limit for an individual is 4 kilograms.

Simple tips for investing in gold

Now that you know about the various options, the following tips will further clarify how to invest in gold.

Incorporate gold as a part of your asset allocation strategy

Gold as an asset can complement your overall investment portfolio. It is a popular choice for investors who want to diversify their portfolios beyond traditional products like stocks and bonds. By including gold in your portfolio, you can reduce the overall potential risk of your investment portfolio.

Evaluate the benefits and pitfalls

There are various kinds of gold investments, such as buying physical gold, gold ETFs, gold mining stocks, and gold mutual funds. Understanding each investment option's risks and benefits is important before deciding. For example, investing in physical gold involves storing and securing the asset, while investing in gold ETFs or gold mutual funds may involve fees and expenses.

Consider its role in your portfolio

Investing in gold as an asset can serve different purposes for investors, such as hedging against inflation or providing a safe haven during market uncertainties. Depending on your investment objectives, you may allocate a certain percentage of your portfolio to gold or use it as a temporary investment during market downturns.

Monitor the price of gold

It is important to monitor gold's price and understand the factors that influence it, such as geopolitical events or economic data, so you can make informed decisions when to buy or sell.

How to invest in gold as a long-term asset

Gold can be a valuable long-term investment that appreciates in value over time. Instead of focusing on short-term price fluctuations, investors should focus on gold's long-term potential.

Conclusion

Investing in gold opens up several investment opportunities for diversifying your portfolio. If you know how to invest in gold the right way, it can be a valuable addition to your portfolio. It is possible to benefit from gold investments over time if you monitor its price and invest in it as a long-term asset.

Gold investment options offered by IDFC FIRST Bank include Fixed Deposits, Mutual Funds, and sovereign gold bonds. These investments are supported by a proficient research team that aims to maximize your returns. Start your investment journey today with the guidance of these experts for a secure and prosperous future.

Disclaimer

The contents of this article/infographic/picture/video are meant solely for information purposes. The contents are generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. The information is subject to updation, completion, revision, verification and amendment and the same may change materially. The information is not intended for distribution or use by any person in any jurisdiction where such distribution or use would be contrary to law or regulation or would subject IDFC FIRST Bank or its affiliates to any licensing or registration requirements. IDFC FIRST Bank shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information mentioned. Please consult your financial advisor before making any financial decision.