The much-awaited festive season has finally begun. Durga puja, Dussehra, Dhanteras and Diwali, all these festivals are considered auspicious when it comes to buying a new home, starting a new business or buyinggold jewellery.
Given that buying gold jewellery is a tradition deeply engraved in many different cultures across the country, the festive season will as usual likely see an uptick in people buying gold.But did you know that you can buy gold without purchasing physical jewellery?
Curious to know? Here are the other unique ways in which you can buy gold this festive season.
Different Ways To Buy Or Invest In Gold This Festive Season
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1. Gold ETFs
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Gold Exchange Traded Funds (ETFs) are passive investment instruments in the form of units representing physical gold, maybe in paper or dematerialised form. One Gold ETF unit is equal to 1 gram of gold and is backed by physical gold of very high purity.
Gold ETFs are listed and traded on the NSE and BSE, just like stocks, hence combining the flexibility of stock investment with the simplicity of gold investments. These can be bought and sold continuously in the market at prevalent prices.
Keep in mind that gold ETF’s direct pricing of gold ensures transparency in holding the ETFs, which are represented by 99.5% of pure physical gold bars in most cases. Also, unlike physical gold jewellery, gold ETF can be bought and sold at the same price pan-India, thanks to its digital form.
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2. Gold Funds
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Gold funds are a type ofmutual fund, in the form of open-ended investments based on the units provided by gold ETFs.
In fact, gold funds can be termed as a variant of gold ETFs, with the key difference being that ETFs invest in a range of gold securities, but gold mutual funds do not directly invest in physical gold but take the same position by investing in gold ETFs. Gold funds’ investments are made generally into stocks of gold-producing and distributing syndicates, physical gold, or the stocks of mining companies. So, by investing in gold funds, you invest in this asset (gold) without having to purchase it in its physical form.
The primary aim of gold funds is wealth creation by making use of the potential of gold as a commodity. Each gold fund, like othermutual funds, has a fund manager who takes investment decisions as per the objective of the fund.
Also Read:Kerala Becomes The First State In The Country To Introduce A Uniform Gold Rate
3. Digital Gold
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Digital gold is a relatively new-age investment instrument that allows you to invest in pure 24-karat gold and securely store it in vaults under your ownership.
Whenever you wish to take possession of that gold, you can redeem the digital gold for 24 Karat pure gold. To purchase digital gold, all you need to do is enter the amount in rupee or the weight in grams and then buy the gold of a fixed value or weight as per live market rates. You can conveniently pay online through methods like UPI,cards, net banking etc. That's it.
Your gold is now stored securely in a vault instantly, and your account can be accessed at all times. As far as redeeming it is concerned, you can either take physical delivery of the gold in different forms like coins or bullion or sell it in the digital form as it is.
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4. Gold Savings Schemes
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Gold savings schemes allow you to periodically (mostly monthly) deposit some amount with a jeweller for a fixed tenure, just like you do bank RD (Recurring Deposit) or Mutual Fund SIPs. At the end of the tenure, you can purchase gold from that jeweller for the amount accumulated through such a scheme.
However, unlike an RD orSIP,a gold savings scheme does not offer any interest on the deposited sum. So, the jewellers sometimes offer to give an incentive at the end of such schemes, like paying one instalment every year or giving a gift item, discounting the last instalment etc.
Also Read:Explained: WhyGold RatesDiffer Across States In India?
5. Sovereign Gold Bonds (SGB)
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Issued by the Reserve Bank of India, SGBs are government securities denominated in grams of gold.
Simply put, these are RBI-mandated certificates issued against grams of gold, which allow you to invest in gold without the strain of safekeeping the physical form of this asset. SGBs act as a secure investment tool because gold prices are less susceptible to market fluctuations.
As these bonds are issued by theRBIon behalf of the Government of India, a particular window is pre-set for subscription, during which a sovereign gold bond scheme is issued in the name of investors in tranches. Generally, the RBI announces the issuance of the latest sovereign bonds in a press release every 2-3 months, with a usually one-week window during which you can subscribe to this scheme and purchase the SGBs.
Given that RBI has conductedSovereign Gold Bond Scheme auctions twice this yearalready, the next tranches are expected to be in 2024.
Also Read:HowGoldJewelleryPriceIs Calculated In India?
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