Best Ways to Invest in Gold in India

Best Ways to Invest in Gold in India

Recently, many readers have asked me that, which are the various ways to invest in gold in India? And that’s why I thought that I should write a separate post on this topic. So that you can know that which are the various ways by which you can invest in gold in India?

So Here we go….

There are basically two broad ways to invest in Gold in India – Physical & Demat (Paper/ETF). Here are those two ways.

01) Physical Gold

The first and most ancient way to invest in physical gold is, physical gold. It’s as simple as you read it. I mean you buy a physical gold from someone and keep it in your custody.

Here are the various ways to buy a physical gold in India.

- Friends & Families

- Jewellers

- Banks (Banks like HDFC & ICICI sell physical gold coins and bars)

- Post-office (Well, once upon a time in many cities of India, the government post offices started selling physical gold)

The main advantage of physical gold is that, you feel its physical shininess and you can make ornaments from it.

The main disadvantage of physical gold are – Purity Issue and Safety issue.

If you want to buy a gold only for the investment purpose than safety of that gold will be the main issue. And of course the purity of that gold. However, with the certified gold coins and bars selling by the banks, it is becoming really easy to invest in physical gold.

02) Gold ETFs / Demat Gold

Since past few years, the new investment modality for gold has came in India which is known as Gold ETF also known as Exchange Traded Funds. They are just like the traditional mutual funds which invest in physical gold on your behalf rather than in stocks and bonds.

1 unit of such Gold ETFs closely track the price of 1 gram (or 1/2 gram) of gold.

The main advantages of Gold ETFs are,

- No purity issue

- No Security issue

- No Wealth tax as you are holding that gold in the demat/paper form.

So if your main purpose of buying gold is the investment purpose than you can go for Gold ETFs. Gold ETFs are listed on the stock exchanges so there is no problem of its liquidity. You can sell them anytime and cash out your money from it.

Thus, the above two are the basic two ways to invest in gold in India.