Gold always attract all types of investors and has its fixed place in almost everyone's portfolio. It is the favorite asset class of Indians. And, when we thought about investment in gold we go for buying gold jewellery.
But, apart from jewellery, there are many Gold investment options available in India. Let's us see which are the different ways/ options to invest in gold.
1) Physical Gold : As I mentioned earlier, purchasing gold in form of jewellery is a common choice in India. Apart from jewellery you can buy gold bars, gold biscuit and gold coins. If you wants to invest through these means, buy it from a reputed jeweler to avoid problems of purity.
2) Gold ETF : It is similar like e-Gold, electronic form of investment of gold. It is like normal mutual funds. ETF stands for Exchange Traded Funds, which means these are traded on a stock exchange. Every units of ETF is equivalent to 1 gram of gold with high purity.
You need to have demat and trading account for managing gold ETF through which you can buy or sell units. Remember, you can not convert it into the physical gold.
3) Gold Savings Funds : Gold mutual fund schemes are not traded on any exchanged. Gold mutual funds operate just like other mutual fund where you can invest via monthly SIPs. In other terms, these are nothing but fund of funds that invest in Gold ETFs. You don't require demat account and trading account to buy them.
4) Gold Monetisation Schemes : It is like your saving account, where banks will accept gold for short term investment and you will earn interest either in cash or gold units at the time of maturity. Long-term investment will be accepted on behalf of the government.
5) Gold Sovereign Bonds : These bonds will be issued by the Reserve Bank of India on behalf of government. They will be denominated in multiples of grams of gold from 2 grams to maximum of 500 grams for 5-8 years. These bonds can be used as collateral for loans.