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| February 20, 2023

What are some tricks to buy gold online or offline?

Gold has been a big part of Indians’ lives for centuries. Be it for adornment, aesthetics, celebration, or investment- gold ticks all the right boxes. This yellow metal is considered recession–proof, a safety net for future uncertainties.Gold can be included in your investment portfolio as a diversification asset. Although buying physical gold, whether as jewellery or gold coins, seems like a great asset to have, we often overlook the associated costs. Costs that aren’t considered by many such as storage, making charges and insurance might take away from the generated returns. Apart from this, selling your gold at a fair price requires effort and time. Another option is buying Digital Gold which doesn’t incur storage charges but might have delivery charges. Thus, you should be careful about purchasing genuine and certified gold at standard gold rates.

Offline Gold Purchases

Physical Gold: The easiest way to buy gold offline in the form of jewellery, gold coins, bars, etc is from a physical store. Gold articles can be pledged to get a gold loan to fulfill immediate financial needs. Many stores have schemes that allow you to purchase gold on EMI.

Gold Saving Schemes: These yearly and half-yearly schemes are offered by many jewelers. Under this scheme, the customer is required to pay a monthly installment for a particular tenure and the last installment is paid by the scheme provider. The total amount collected at the end of the tenure is then redeemed for jewellery.

Online Gold Purchases

Digital Gold: Many websites and mobile applications sell and buy digital gold online. PhonePe, HDFC Securities and Paytm are some of the websites and mobile apps from where you can buy digital gold online.

Sovereign Gold Bonds (SGB): These fixed-maturity gold bonds can be bought online via a lump sum payment. The minimum amount of gold that can be invested online through these is 1 gram and 4 kg is the highest amount that can be put in SGB. The redeeming price will be determined in local currency. The bonds have a five-year lock-in period and a full term of eight years.

Exchange Traded Funds (ETFs): ETFs can be bought through a Demat account. ETFs allow you to keep your gold investment without owning any physical gold.

Gold Mutual Funds: It is one of the easiest ways of buying gold online. Gold mutual funds allow you to own shares in multiple gold-related assets, like many companies that mine or process gold, but you don’t own the actual gold or individual stocks yourself.

Things to Consider Before Buying Gold Offline

Current Gold Prices Per Gram: Gold prices are affected by many factors such as:

  • US Dollar Dynamics
  • Global Market Conditions
  • International Relations
  • Import duties
  • Demand and supply
  • Taxes
  • Gold rates set by local gold associations.

It is advisable to do proper research regarding the gold rate for the day in your city before making a gold purchase.

Purity: Gold is available in several purity levels, such as 14K, 18K, 20K, 22K, and 24K. The purer it is, the more expensive it is and the higher the return value. Gold coins, 1-gram gold coins, or 8 gm gold coins, are generally made of 24K gold. Gold jewellery is made of 14K, 18K, 20K, and 22K. The simplest way to check for purity is to look for a hallmark and a certificate, like any other investment, assures that the gold you bought is legitimate.

Proof of Purchase: Always insist on a bill that includes the proof of purity, proof of actual ownership, and the right price of gold purchased. This also helps if you need to sell gold articles.

Making Charges: The final price of any gold article is inclusive of the cost of making that particular piece of jewellery. Making charges could differ for different jewelers.

Buy-Back Policies: Many stores offer buy-back policies wherein you can sell back the gold you purchased from them. Some stores also allow the repurchase of gold bought elsewhere. Do go through the buy-back terms and conditions thoroughly.

Things to Consider Before Buying Gold Offline

Although buying gold online is quite convenient and quick, you should do your due diligence.

Authenticity of the online platform: It is advisable to buy online gold only from genuine and reputed platforms. Due to increasing cases of cyber fraud, always pay directly on the website and avoid agents or middlemen. Always check for the authenticity of the URL of the particular website.

Purchase Amount Restriction: Some online websites have an upper cap on the purchase amount. Choose your gold pieces accordingly.

Cash Transactions: Most online gold providers do not accept cash on delivery and the payment has to be made upfront. Do check for the legitimacy of the beneficiary account before making a payment.

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