Published: September 2, 2024 3:59 PM IST 
Gold Investment: Gold is a popular investment in India traditonally. Rate of the gold which was Rs 3,000 per gram in 2013 has now become around Rs 7,000 per gram. Which means there is almost 230% appreciation in Gold rate since last 10 years. It looks very attractive when you see the number of 200%. But do you know that the actual value of the gold you have with you is not Rs. 7000 per gram but it’s 25% to 30% lesser than its market value.
You can get to know the actual value of the gold you have, when you try to sell it in the market. As Jwellers will deduct 25 to 35% making charges rate when you actually sell in the market. Apart from this you will also have to pay GST & other while buying and selling the Gold.
But now there are better ways available in the market, where you don’t need to buy the physical Gold but you can still invest in the Gold. Investing money in Digital Gold, Gold Bonds, Gold Mutual Fund, Gold ETFs can save your 25% to 30% making charges. It will also reduce the risk of theft and other expenses like bank locker charges.
Let Us See one by one Digital Bond VS Gold ETFs VS Gold Mutual Fund
You can go to any mutual fund app and buy digital gold sitting at home. Its price is equal to that of gold in the market. you can buy Gold from as low as 1 Rs. This Gold is 99% pure. For example if you buy 10000 rs gold, then the company from which you are buying the gold buys the same amount of Gold and keeps it in the locker. And for this they do not take any making charges from you. But you have to pay 3% GST which you otherwise also pay while buying Physical Gold.
How To Sale Or Obtain Digital Gold?
You can sell this gold whenever you want, and save 25% to 30% making charges. You only have to pay storage charges and selling charges to the company. Which can be 3% to 6%.There will be no risk of theft or risk of storing gold in a locker.
But if you don’t want to sell this gold but you want the physical delivery of the Gold, then you have to pay the transportation cost for it. Also for physical delivery you need to pay a making charge for it. But the making charges for digital gold are usually lesser than traditional jwellers.
If you sell Digital Gold within 3 years then you have to pay STCG tax and if you sell after 3 years then you have to pay LTCG tax. Also note that it is not allowed to buy and keep this gold forever, sometimes you have to sell it or call it home.
You can buy Gold Mutual Fund online or on the app of any mutual fund. Just like you start SIP for any mutual fund, you can start SIP of Gold Mutual Fund from as low as Rs.500. You can pay this amount every month or every 3,6 months or you can pay some amount once (Lumsump) as you want.
Mutual fund companies invest this money in GOLD ETF. The value of your money increases when the price of gold increases and decreases as per market price of Gold.
In case you want to buy gold of a certain amount you can withdraw this money and make jewellery. The market price of Gold Mutual Fund appreciates almost in the same proportionate of Gold’s value. Hence while investing in Gold Mutual Funds, investors are advised to check AUM for these funds and take their decision.
While withdrawing Gold Mutual Fund, exit load charge has to be paid. But this charge is very less compared to the making charges. As expense ratio charges of 1.5% have to be paid. Also if you sell within 3 years then you have to pay STCG TAX. One more thing is that you cannot take a gold loan on these funds, nor can you take delivery of physical Gold. You have to withdraw money from Gold Mutual Fund as per your requirement and it also depends on the terms and conditions of the mutual Fund you buy.
Gold ETF Bonds money is directly invested by the companies in physical gold or investments related to the gold like Gold mines or gold related companies. The money in this fund also increases as the price of gold increases. But here, if you want, you can actually take a physical delivery of gold up to 1KG. Here the gold is considered as 99% pure.
Buying gold here can be done only in 1 gram, 2 gram. Here you don’t have the option of SIP or Lump Sum like Gold Mutual Fund. Also, if you want to invest here, you have to open a DEMAT account and invest money from it.
You will get the same benefits like you don’t have to pay making charges. While selling gold, here too, like Gold Mutual Fund, 1% expense ratio has to be paid. Similarly STCG tax is payable on sale within 3 years and LTCG TAX on sale after 3 years. Gold loan cannot be taken even on this bond.
(Disclaimer: The information provided in this article is for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.)
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