GOLD IS GOLD

Gold is considered to be one of the safest investments and one of the most trusted instruments to fight inflation . 

There is a reason that Indians love Gold and consume 25 % of the available inventory.

The price of Gold has just increased by 4-5 times in the international market (400 USD - 1800 USD ) . Whereas in India the price of gold per 10 grams was 24 times (1970 INR - 48000 INR) . Rupee Depreciating against the US Dollar plays a key part in it. 

                In 2014 Gold was trading at 28000 and in 2020 it reached 48000.

Next, we will see the different ways in which we can invest in gold 

Types of Gold

1) Physical Gold

    The traditional way of investing in gold is by buying jewels, coins, and bars from shops or banks. Here you have to pay manufacturing charges which brings down the value of  the investment. Also, you have to ensure safety either by keeping it in a bank locker or keeping it in a safe.

Pros: You physically own the gold

Cons: Highest Cost of Acquisition, Worst method when the sole intention is investment

2) Digital Gold

   The advantage of buying digital gold is that you are technically buying the purest gold without the making charges, etc. Also, the service providers have to ensure the safety of  Gold, they even have to ensure in the case of Digital Gold (Paytm, Amazon)

1) Gold ETF 

      Several exchange-traded funds are available that mirror the benchmark performance of Gold. Essentially your gold will be like a stock which has ups and downs based on it everyday pricing. 

 Nippon Gold Bees is the largest Gold ETF by volume (Volume will ensure better Liquidity) . SBI , HDFC , Reliance , Kotak ,etc all offer Gold ETF's  

Pros : High Liquidity , Initial Cost of investment is lesser than that of Sovereign Gold Bonds

Cons: Investors need basic stock market knowledge (transaction & Taxation)

2) Digital Gold 

     You would have seen digital gold sections on Paytm , Google Pay, and Amazon Pay. Digital gold is the best way to start a saving habit and can be even used by kids as you can invest for as low as 1 - 5 Indian Rupees . 

The 3 major service providers in this field are Augmont , Safe Gold and MMTC (Government) . Amazon uses Safe Gold while PayTM uses MMTC 

Pros: Easiest to Invest, Initial investment is the least amongst All options

Cons : Tax and other expenses are more when compared to Sovereign Gold Bonds

3 ) Sovereign Gold Bonds

   The best available option is based on transaction costs and taxation. Sovereign Gold Bond is issued by RBI and most banks provide easy access to purchase the same. It also pays out a 2.5% interest every year

SGBs can be held in paper or Demat Form, It is advisable to hold the same in Demat form to ensure liquidity. As mentioned it is tax free, if you exit in the 8th year. However, you can exit prematurely as well (Demat form) and as of now only capital gain tax has to be paid

Pros:  Tax Free, Least Acquisition cost amongst all options , Liquidity, Easy Access

Cons: A minimum of 1 gm has to be purchased, Lock in period if you want it to be tax-free

 Sovereign Gold Bonds is the author's choice!