5 Minutes Read
Akshaya Tritiya 2024: Digital alternatives to buying gold
KV Prasad Jun 13, 2022, 06:35 AM IST (Published)
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Summary
Buying gold has become easier for investment purposes, and here are four options to consider.
As Akshaya Tritiya draws near, several Indians are preparing for the age-old tradition of buying gold, driven by the belief that it brings good luck and prosperity. Traditionally, many buy physical gold, typically in the form of jewellery.
However, while holding ornamental value, jewellery gold is not often entirely pure. This means that it may contain alloys or other metals, thereby diluting its purity.
Purchasing jewellery also often entails additional charges such as making charges, wastage, and GST, which can affect the overall cost.
Therefore, amid the excitement of Akshaya Tritiya, here are some digital alternatives to buying physical gold –
Gold ETFs (exchange-traded funds)
Gold-backed ETFs are a popular way for investors to buy and sell gold without physically owning it. They are bundles of gold investments that you can buy and sell on the stock market, just like stocks. They are designed to match the price movements of gold itself, either by owning physical gold or investing in gold futures contracts.
An advantage is that they are easy to buy and sell, so you can get in and out of them quickly. They also offer a way to invest in gold without needing to deal with physical gold. They are a convenient and accessible option for those interested in adding gold to their investment mix.
Gold mutual funds
Gold mutual funds are investments where many people contribute money to buy various gold-related assets, like gold mining companies or actual gold. These funds are managed by professionals who decide where to invest. They offer an easy way for investors to get into the gold market without having to deal with buying physical gold.
You can buy shares of these funds through a broker or directly from the company. Keep in mind though that their performance can be affected by the ups and downs of the gold market and other economic factors.
Sovereign gold bonds
Sovereign gold bonds are government-backed investments valued in grams of gold. The Reserve Bank of India issues these gold bonds and they are an alternative to owning physical gold. When you buy them, you pay the issue price in cash, you get cash back when it matures. They give you the chance to invest in gold and pay you interest twice a year.
Later, you can get the market price for your gold when you sell them. There are also tax perks, like no capital gains tax if you sell them later.
Digital gold
Digital gold refers to owning gold, but instead of having physical gold bars or coins, you have it in digital form on your phone or computer. You can buy and sell it through apps or platforms provided by banks or tech companies. You can buy even tiny amounts of gold, making it affordable for anyone. Just make sure to use trusted platforms, and keep an eye on any fees they might charge.
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