Dhanteras holds great value in Hindu households, people consider buying metals, especially gold a mark of good luck. That’s why on this day there is a long queue outside the gold shops waiting for there chance to buy gold. The price of gold has typically risen during some of the biggest market crashes, making it a safe-haven of sorts. So, it’s better to build wealth via gold investment.
Dhanteras is marked as the day of wealth and prosperity so buying gold/ silver coins, ornaments are considered as auspicious. Though buying physical gold has its own set of disadvantages like mostly it is bought for personal use with high making charges which does not put it under investment because the yield is low, other than that storage hassles, security, etc. makes it not a good option to invest in gold.
So, this dhanteras be wise and don’t just buy gold, invest in gold in the following ways in order to get the best returns –
Sovereign Gold Bonds – These are government securities denominated in multiples of gram(s) of gold. They are one of the substitutes for investing in the physical form of gold. Investors can apply for the bond through SEBI authorized trading members and financial advisors of the National Stock Exchange of India Limited and other channels specified by RBI. Application forms will be provided by trading members, authorized agents and can also be downloaded from RBI's website.
The bond bears interest at the rate of 2.50% (fixed rate) per annum on the nominal value. Interest will be credited semi-annually to the investor's account and the last interest will be payable on maturity along with the principal. Bond carry sovereign guarantee both on redemption amount and on the interest. Investors will earn returns linked to gold prices. Available in DEMAT and paper form.
Minimum investment: 1 gram. Maximum investment: 4 Kgs for individual, 4 Kgs for HUF and 20 Kgs for trust and similar entities per fiscal (April-March).
Gold ETF’s – Gold ETFs are commodity funds that trade like stocks and have become a very popular form of investment. It invests primarily in physical gold with each unit typically representing 1gm of gold. For investing in gold ETFs, you need Demat and trading accounts.
Digital Golds – Apart from a gold-backed financial instrument like ETF’s, or physical gold from jewelers, there is now a third option for buying gold. There are two options to buy gold digitally 'Digital Gold', offered on the mobile wallet platform Paytm and 'GoldRush' offered by the Stock Holding Corporation of India. Both are offered in association with MMTC - PAMP.
As per the GAP offered on the Stock Holding Corporation platform, a customer can buy from a minimum value of Rs 1,000 or multiples of Rs 100 thereafter. He/ she is not obligated to make any fixed or periodic payments unless the ECS facility is opted for.
On the other hand, as per the GAP offered on the Paytm platform (app and website), a customer can buy gold for as low as Re 1. The plan allows you to buy and sell in fractions of, say 0.1 gms or of Re 1 or Rs 2.
Apart from Paytm, Mobikwik and PhonePe have started offering digital gold on their platforms.
(Mutual Fund investments are subject to market risk. Kindly read all the related documents carefully before investing. Illustrations are for example only, there is no guarantee of returns. Past performance is not an indicator/guarantee to future returns)