Several Options for Investing in Gold in India in 2022
Updated On Jul 04, 2022
Table of Contents
Coming to the million-dollar question, what are the best ways to invest in gold, and which one of them is the best? For ages, the conventional and the only best way to invest in gold was to buy physical gold, in the form of coins, bullions, or jewelry. But with time, more evolved forms of investment emerged like Gold ETFs (exchange-traded funds) and Gold Mutual Funds. Gold ETFs are like buying proportionate ownership in gold without having to carry or store the actual physical gold. It is becoming the new favorite among investors as it frees them from bearing the risk of theft or burglary. Gold Mutual Funds involve investing, not in gold, but companies engaged in gold mining. In the year 2021, these three seem to be the best ways of investing in gold. They come with their own set of pros and cons. Let's look at some of the contrasting features between Gold, Gold ETFs, and Gold Mutual Funds.
Modes of Investment
Even though the above-mentioned ways of investment in gold have emerged tremendously over the past few years, there are some other ways of investment as well that an investor can opt for, if planning to invest in gold.
Investment in Solid Gold
Investment can be made with a cliché process of putting money in solid gold items like gold coins, biscuits, or bars. This purest form of purchase involves minimal risk of the forgery but a high risk of theft and storage.
Gold Schemes
Generally, jewelers come out with a lot of gold schemes from time to time for their valued customers. An investor has to invest a certain amount in the gold scheme, just like a SIP, for a certain period of time. After maturity, an investor has a lump sum amount in hand for which they can purchase the gold.
Digital Gold
In a recent development, digital gold has gained a lot of popularity in the financial marketplace. Fintech platforms provide the option of buying and selling gold just like any other digital transaction. Investors should keep in mind that digital gold is not offered on all platforms and one should analyze the market carefully before investing to avoid forgery.
Sovereign Gold Bonds
Supervised by the Reserve Bank of India, Sovereign Gold Bonds were introduced by the Government of India in the year 2015. The objective behind launching it is to offer an alternative option for investment in solid gold. Usually comes with a 5-year lock-in period, Sovereign Gold Bonds can be redeemed in cash later.
Conclusion
Each type of investment comes with its flaws and powers. Investment in gold should be made carefully just like any other investment option keeping all the limitations in mind. Investments should be based on market research and not by any other influence.
Also read: Why Is Gold Investing Beneficial?
