Those who are looking to build wealth by investing in gold, here are some hassle-free alternatives to capitalise on the yellow metal’s growth.
Prices of precious metals continue to soar, with gold already gaining 51 per cent and silver 61 per cent in one year. While the love for gold jewellery is not going to fade, it is also a fact that they are not a great investment. Between hefty making charges, purity risks, and the constant worry of storage and theft, your actual return on a piece of jewellery is significantly diminished. Those who are looking to build wealth by investing in gold, here are some hassle-free alternatives to capitalise on the yellow metal’s growth.
1. Digital Gold
This is the easiest way to invest in gold. You can buy digital gold 24/7, with no minimum investment. Investment in digital gold can start with as low as Rs 1. The gold is fully backed by certified physical gold held in vaults, but you only own the digital certificate. You get pure gold pricing without the making charges. Moreover, buying and selling is relatively easy, and one can even redeem it as physical gold later.ย
2. Gold ETFs
If you are comfortable investing in stock markets, gold exchange-traded funds (ETFs) can be an efficient route. A Gold ETF unit represents a share of physical gold (usually 99.5 per centย pure) held by the fund. To buy gold ETFs, you will need a Demat account. Gold ETFs are not just highly liquid, as you can sell during market hours, but also strip away the cost involved in physical gold, like hallmarking and others.ย
3. Gold Mutual Funds
Those who don’t want to open a Demat account, gold mutual funds are the best option. These funds invest in gold ETFs. This “fund-of-fund” structure offers professional management and allows you to invest systematically through a SIP (Systematic Investment Plan), just like any other mutual fund. While it has a slightly higher expense ratio when compared to gold ETFs, the convenience can make it worthwhile for several investors.
4. Sovereign Gold Bonds (SGBs)
Sovereign Gold Bonds (SGBs) are government securities, issued by the RBI, denominated in grams of gold. You get the benefit of gold price appreciation plus a guaranteed semi-annual interest payment, currently at 2.5 per cent per annum. If you hold them until maturity (8 years), the capital gains are completely tax-exempt. They are 999 purity and risk-free, making them the superior choice for conservative, long-term wealth preservation. However, no fresh investments are available in SGBs, and they can only be purchased through the secondary market.ย
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(This article is for informational purposes only and should not be construed as investment, financial, or other advice.)