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Smart Ways To Invest In Gold This Dhanteras

Adhil Shetty



Dhanteras marks the beginning of Diwali, the festival of lights. One way in which many celebrate this day is by splurging on gold, starting a new venture or making a big purchase because Dhanteras is considered to be extremely auspicious. If you’re planning to go the traditional route by buying gold, it’s a good idea to evaluate all the options available to you.

Gold helps you build a hedge against inflation and can be passed down as an heirloom too. While buying gold jewellery is an option, it isn’t the best one as far as return on investment goes. This is because you lose a fair bit on making and wastage charges. So if Return On Investment (ROI) is a priority, take a look at the other ways in which you can invest in gold and honour traditions this Dhanteras.

Invest In Gold Coins And Bars

When you buy gold bars and coins, the making charges are much lower. This is because gold bars and coins aren’t made to order and are produced in large quantities. As a result, economies of scale come into play. This ensures that your additional costs are minimal and you’re getting more gold for the amount you spend. Also, liquidating them is easier too as you can sell them to all kinds of investors. When you buy jewellery, this is slightly trickier.

Invest in E-Gold

Another smart, flexible way to invest in gold is to choose e-gold. This is a dematerialised form of gold and you can buy it from the National Spot Exchange Limited (NSEL). The advantage with e-gold is that you don’t have to worry about its security, as this is NSEL’s responsibility. Additionally, you can covert it into physical gold at a later date if you so wish. You can store it digitally or request it in physical form (once you accumulate over 1g) and have it delivered to you.

Invest In Sovereign Gold Bonds

If you don’t wish to bear the risk and the costs of holding and storing physical gold, invest in Sovereign Gold Bonds. SGB currently yields 2.50% p.a. paid twice a year on the nominal value. On redemption you will get returns as per the average closing price of 999 purity gold of the past 3 days. SGB bonds are issued in the denominations of 1g of gold and its multiples. The minimum investment that you have to make is 1g, and the investment limit for an individual or a Hindu Undivided Family is 4kg while the investment limit for trusts and other related entities is 20kg. Holding SGBs may have a risk of capital loss, but only if the market price declines.

Invest In Gold Exchange-Traded Funds (ETFs)

Gold exchange-traded funds are another form of gold that you can buy and sell through stock exchanges like BSE or NSE. These ETFs are traded with gold as the underlying asset. You can set up a demat account to invest in gold ETFs easily, and also buy and sell units equally conveniently. Additionally, you can choose to invest in ETFs either in a lumpsum or via SIPs as per the amount you are able to spend.

By selecting one of these instruments this Dhanteras, you can keep the tradition going while securing your future simultaneously.

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