Purchasing gold on Diwali has always been the most common tradition in India. Purchasing this expensive yellow metal is believed to bring wealth, good luck and prosperity to every household on this auspicious occasion.
Despite its rising prices, especially during the festive season, individuals consider this purchase a fruitful investment. However, individuals unwilling to purchase gold most conveniently can consider the options.
Top 4 Ways to Purchasing Gold this Diwali 2022
Purchasing gold on Diwali has always been important for Indian citizens. This is because gold investment is considered safe, directing long-term value. However, in recent times, digital gold has been doing the rounds, attracting both ordinary citizens and investors.
However, to continue with the tradition of buying gold on Diwali, there are some options that one can consider instead of doing it the traditional way:
- Digital Gold
It is a unique investment option allowing individuals to purchase and sell 24k gold online at market prices. Moreover, once the gold is collected in the digital gold account, one can get it delivered to the doorstep in 24k gold coins. Such an investment option is rapidly gaining popularity due to its flexibility and affordability.
Considering flexibility, individuals can anytime sell, purchase and get it home delivered. Also, in terms of affordability, individuals can purchase digital gold in fractions at a considerable low cost.
Investment in digital gold is a simplified and safe process as the quantity of gold one purchases on the platform is favoured by an equal amount of gold safely kept in an insured vault. Besides allowing customers to purchase, sell and get it delivered, one can save substantially in digital gold through various gold savings plans. As per convenience, customers can start, stop and reset the plan anytime.
- Gold Exchange Traded Funds
It is a paperless gold investment option where the funds are collected from willing investors and invested in gold-producing companies. They monitor the gold rates domestically and represent gold in a dissolved form. Investors consider equity-based gold funds, which are primarily mutual fund schemes where the investments consist of stocks.
Such stocks are accommodated by the companies associated with mining, extraction, processing and gold marketing. Very few companies are enlisted on stock exchange companies (NSE and BSE) and hence, can be bought and sold through a stockbroker.
However, to do so, one needs a Demat account. Since it is a dissolved form of investment, there are no usual concerns, such as storage risk, purity, etc.
- Gold Funds
Gold funds are unrestricted funds that are invested in gold ETFs. This is also why they are referred to as Funds of Funds (FoF). In gold funds, individuals can in invest any amount at any time. The method of purchasing gold in such funds is comparatively easier than investing in gold ETFs as it does not demand a Demat account.
In contrast to gold ETFs, such funds allow individuals to invest through SIP (Systematic Investment Planning) rather than making a substantial investment. Just like gold ETFs, gold funds are closely related and monitor the exact price of gold.
- Gold Sovereign Bond (GSB)
If you are willing to purchase gold on Diwali, this is another significant option for possessing physical gold. Sovereign gold bonds are government security bonds supported by physical gold. Since the RBI verifies them on behalf of the Indian Government, they are secured for investments. They also bear a guarantee on both the funds and interest attracted on the bonds. Moreover, the earned interest on it is associated with the prevalent gold rates in the market.
Hence, this scheme offers similar benefits as that of physical gold. Similar to physical gold, they can be conveniently utilised as loan collaterals and sold or traded at stock exchanges like BSE and NSE. The tenure of such schemes ranges between 5-7 years, during which the units can be liquidated at customers’ convenience. Lastly, in this scheme, the tax treatment is similar to physical gold for investors.
Which Gold Investment Option Must You Choose?
Buying gold on Dhanteras or gold investment benefits you in the long run. Gold is included in your investment portfolio can protect you against market fluctuations, currency devaluation and inflation. Moreover, you can rely on gold during financial emergencies, as gold can be liquidated at any time. The ways to invest in gold are multiple, and each of them involves rewards and risks.
Hence, you must know the pros and cons before selecting a gold investment option. Also, knowing the reason behind purchasing gold can assist you in making the right choice. If you are seeking it for investment purposes, you can opt for mutual funds or gold ETFs as it does not include storage risks or making charges like in physical gold.
Opting for digital gold is also a smart choice. You can purchase it at prevailing market prices without paying any storage and making charges. Moreover, you can get it delivered to your doorstep in 24K gold coins form in damage free packaging. Moreover, with a digital gold option, you can get a gold savings plan where you can withdraw the collected amount anytime, as it does not have any lock-in period.
With gold earning popularity as an investment option, purchasing one enhances an individual’s financial portfolio. Moreover, purchasing gold on Diwali is a good investment as one can enjoy various deals and offers. However, one must know some smart avenues and tips before moving forward with the investment. The investor or purchaser needs to be aware enough to select a recognised and authentic brand.
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