Gold is the preferred form of investment for Indians, and Akshya Trithya is the most auspicious time to buy gold. But, if you are planning to buy gold from the high-street jeweller, take more time to think as now you can invest in gold digitally from the comforts of your home. Digital gold has become popular as it offers you complete flexibility in deciding the amount you want to invest for long term wealth creation. Moreover, being in digital form you do not have to pay hefty fees for keeping your gold safe in a locker.Also Read - Akshaya Tritiya 2021: Vitthal Rukmini Temple Decorated With 7000 Mangoes, to be Distributed Among Covid Patients | Watch
There is no doubt that digital gold has an edge when it comes to cost-effective ways of investing in gold. From sovereign gold bonds, exchange traded funds to gold accumulation plans there are many options available to invest in digital gold. Also Read - Akshaya Tritiya 2020: Significance And Interesting Facts About Parasurama Jayanti
Here are some of the best ways to invest in digital gold this Akshaya Tritiya: Also Read - Akshaya Tritiya 2020: Best Wishes, Whatsapp Messages, Facebook Status, GiFs, SMS to Send Akha Teej Greetings
Gold Accumulation Plans
You no longer need to run to a far located MMTC shops to buy gold coins on the eve of Akshaya Tritiya. You can buy MMTC coins from the comforts of your home through gold accumulation plans (GAP). It is available on various platform such as Paytm and Motilal Oswal Investment Services. Both the companies in collaboration with the MMTC-PAMP have launched an accumulation plan that allows one to buy, sell and store gold digitally.
While you buy and sell through MMTC-PAMP, Paytm and Motilal Oswal Financial Services work as a facilitator. MMTC-PAMP is a joint venture between MMTC Ltd, a Government of India undertaking, and PAMP SA, Switzerland, a global leader in refining bullion . You may buy gold 24 hours a day for 365 days a year, including public and bank holidays. You can also see the live prices on their websites and mobile application. The prices may vary from company to company, as gold prices in Paytm are exclusive of GST while in Motilal Oswal it shows inclusive of GST. For example: while on Paytm it shows Rs3128, on Motial Oswal app it is at Rs3212.
How to sell? Either you can sell back the gold accumulated to MMTC-PAMP through your platform or you can redeem it in the form of gold coins.
Disadvantages: You can store your gold for a maximum period of 5 years from the date of purchase. Once the period of 5 years completed, it is mandatory to sell or take delivery of the quantity you have bought. In case you redeem your gold after five years, then additional charges will be levied at the time of exit. Also, the amount gets transferred to a separate account maintained by MMTC-PAMP. For claiming the amount you need to reach out to MMTC-PAMP with relevant documents for settlement.
Moreover, if no transaction has been made through your account for 18 continuous months, either buy, sell or redemption, then your account is considered inactive. In such cases the gold in your account gets sold on prevailing prices after deducting charges.
Sovereign Gold Bond
The scheme that allows you to invest in gold in paper form has opened for subscription on April 16 and closes on April 20.The issue price of bonds is ₹3,114 per gram with a discount of ₹50 per gram for digital customers. If you buy it online then the issue price will be ₹3,064.
It is denominated in multiples of gram(s) of gold with a basic unit of 1 gram. At the time of exit you are paid for the number of units bought based on prevailing gold prices. You also earn a fixed rate of 2.5 percent per annum payable semi-annually on the initial value of your investment.
Disadvantages: The scheme opens for limited time and you have to buy gold at pre-determined prices. It does not give you the option to average out your cost, by buying some gold every month. Moreover, unlike gold accumulation plans it does not give you the option to convert it into physical gold.
You can buy gold exchange traded funds from the stock exchange if you have a demat account. It allows you to buy a unit of gold just like you trade in shares. Many mutual funds offer exchange traded gold which are linked to international gold prices.
Off lately, investment in gold ETFs have come down. This may be due to multiple options available for investing in gold in digital form. Also, gold has not given such good return over the past few years. According to Association of Mutual Funds in India (AMFI), gold ETFs saw an outflow of Rs 110 crore in the month of January. In February the outflow was out of Rs 94 crore. Total outflow has been to the tune of Rs 835 crore in the financial year 2017-2018.
Disadvantages: You need to pay around 1% charges in the form of expense ratio while there are no charges on sovereign gold funds.
For investment purpose it is also good to buy gold in digital form as banks charge you a premium of 10-15 per cent over prevailing gold prices. Moreover, you cannot sell gold back to banks. Similarly, there are high making charges on gold jewellery making it unattractive when it comes to investing in gold.