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Gold Investment Options in India: Which One is Best for You?

There are other precious metals, but gold is the most popular as an investment. Due to features such as high liquidity and inflation-beating potential, gold is one of the most popular assets in India. Gold investment can take numerous forms, like if you buy a gold coin, jewellery, bars, gold exchange-traded funds, gold funds, sovereign gold bond schemes, and so on.

Though there are occasions when markets experience a drop in the price of gold, it typically does not stay long and always makes a significant upturn. Once you've decided to invest in gold, you need to carefully plan out your strategy. If you want to learn more about gold investment plans and other data such as different options for investments in gold and other buying options, how to invest in gold online, and much more, you've come to the right place.

Gold Investment Options in India

Buying physical gold in the form of coins, jewellery, or decorations is the conventional way to invest in gold. However, in India, there are some new types of gold investing that are equivalent to buying actual gold but without the difficulties of visiting a store. Let's look at the most common ways to invest in gold today: -

  • Physical Gold Investment : This simply means making a direct investment in physical gold. Physical gold may be simply sold at a greater price in the future. However, it has a few drawbacks, including manufacturing costs, storage problems, and an increased chance of theft.

  • Gold ETFs : Gold Exchange Traded Funds are traded on stock markets like shares, and their major underlying assets are actual gold and stocks of gold mining and processing companies. Investing in gold ETFs requires a Demat (Dematerialised) Account.

  • Gold Mutual Funds : These are mutual funds that are managed by various asset management firms (AMCs) and predominantly invest in gold ETFs.

  • Sovereign Gold Bonds : These are government securities denominated in gold grammes. Sovereign gold bonds are the safest type of gold investment since they are issued on behalf of the Indian government by the Reserve Bank of India. These bonds are exchanged on a market. As a result, in order to buy sovereign gold bonds, the investor must pay the issue price in cash to a SEBI-approved broker (Securities and Exchange Board of India). The bond's interest (guaranteed at 2.5 per cent per annum on the issue price) will be credited to the investor's bank account on a semi-annual basis. Even 1 gram of gold might be used to begin an investment. The gold price will determine the returns. Because of the government guarantee on the redemption amount and interest, sovereign gold bonds are an excellent alternative to genuine gold. A gold bond has an eight-year term. Investors, on the other hand, have a 5-year short and long term. This bond can also be used as loan collateral.

  • Digital Gold : In recent years, digital gold has grown in prominence in the financial industry. Fintech platforms, like any other digital transaction, allow you to purchase and sell gold. Investors should bear in mind that digital gold is not available on all platforms, and they should thoroughly research the market before purchasing to prevent fraud.

Which is the Better Option?

That begs the million-dollar question: what is the most and best way to invest in gold? For centuries, the only way to invest in gold was to buy real gold in the form of coins, bullions, or jewellery. However, more sophisticated types of investing, such as gold ETFs (exchange-traded funds) and gold mutual funds, have arisen throughout time. Gold ETFs are similar to purchasing proportional ownership of gold without having to carry or store physical gold. It is quickly becoming a favourite among investors since it eliminates the danger of theft or burglary. Gold Mutual Funds invest in gold mining firms rather than gold itself.

Planning to invest in gold ETFs and other mutual funds? At Muthoot Finance, you get access to professional fund managers, avail the benefits of diversification, and enjoy advantages like flexibility and liquidity. Visit your nearest Muthoot Finance branch to speak to our investment experts today.

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