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6 Best Ways To Invest In Gold In India

Learn how you can invest in Digital Gold using the Cube Wealth app. Find the best way to add gold to your portfolio.
December 22, 2020

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Indian investors have realised the importance of diversifying their investments beyond gold and traditional options. However, with the advent of digital gold and Gold ETFs, there are new ways for Indians to buy their favourite investment. 

Gold is an asset that does well when the economy is down, as evidenced by the pandemic bear markets, and corrects itself when the markets are stable or high. 

If you’re an investor who is sure of adding gold to their portfolio, this blog is for you. We will walk you through 6 best ways to invest in gold in 2021.  

6 Best Ways To Invest In Gold

You can invest in gold online or offline based on your preferences. What investors generally mean by preferences can be broadly narrowed down to 2 instances:

  1. Only interested in earning profits
  2. Interested profits but also want to touch, feel, see and wear gold. 

Digital gold, Gold ETFs, and gold bonds may be the best way to invest in gold for Type A investors. Jewellery, gold coins, gold bars and gold savings schemes may be better suited for Type B investors. 

1. Gold ETFs

Gold Exchange Traded Funds (ETFs) are passively managed ETFs that invest in gold bullion. You can buy and sell Gold ETFs like stocks on the share market.

Here are the average historical returns and the minimum investment amount.  

 

1 year returns

3 year returns

5 year returns

Minimum investment

19-27%

6-11%

7-8%

1 g = 1 unit


Gold ETFs carry lower charges than physical gold. Type A investors can thus benefit from this. In 2019, individual wealth of approximately ₹2661 crores was invested in Gold ETFs.

2. Digital Gold

Digital gold is one of the best ways of investing in physical gold. You can either buy fractions of gold or grams of gold based on the price of the given day. 

But you don’t have to pay the making charges that are generally associated with physical gold. Moreover, digital gold is safe and doesn’t carry the storage risks of physical gold.  

Investment apps like Cube allow you to buy digital gold with our partner, Safegold. The gold that you invest in has assured purity and is stored in a secure vault backed by Brinks.

Safegold currently has 2,000,000 clients and an AUM of 300+ kg. You can buy and sell 24K gold with a couple of clicks. Learn more about it here. 

3. Jewellery

This is the most traditional way of investing in gold. You can buy pre-made or customizable gold jewellery from any reputable and reliable gold jeweller. 

The cost of jewellery will be based on the gold price of that day and the making charges. Along with that, you will have to ensure that you have secure storage space for the gold at home or at a bank. 3% GST will be applicable to the total value of gold jewellery.

4. Coins and Bars

It’s more affordable to invest in gold coins and bars compared to gold jewellery. There are making charges that will apply but it’s usually lower than gold jewellery. 3% GST applies here too. 

You can purchase gold coins and bars from a reputed gold jewellery store or from a trusted e-retail platform. But it’s important to check the purity and store it in a safe and secure place. 

5. Gold Bonds

Gold bonds or Sovereign Gold Bonds are issued by the Reserve Bank of India (RBI). This is one of the best ways to invest in gold with 999 purity. 

Long term capital gains on Sovereign Gold Bonds are eligible for indication benefits. You can even use Sovereign Gold Bonds as collateral while securing a loan. 

 

Minimum amount

Maximum amount

Interest rates

Liquidity

Holding period

Option to exit

1 g

4 KG

2.50%

Low

8 years

5th year


6. Gold Saving Schemes

Both small scale and large scale jewellers run Gold Savings Schemes. The process is straightforward. You deposit a fixed amount of money over a fixed period of time with the jeweller.

Once the fixed period ends, you can redeem the amount you deposited in the form of gold with the same jeweller. However, you won’t get any interest on the money you deposit. Making charges will be applicable.  

6 Top Gold Investment Options At A Glance

Investment Option

Type

Minimum Investment Amount

Gold ETFs

Online

1 unit = 1 g

Digital Gold

Online

₹1000 on Cube Wealth

Jewellery

Online and Offline

1 g

Coins and Bars

Offline

1 g

Gold Bonds

Online and Offline

1 unit = 1 g

Gold Savings Scheme

Online and Offline

Depends on seller


Summary

Gold investments can be beneficial to an investor’s portfolio due to the relationship between the markets and gold prices. But before investing, it is important to identify what type of gold investor you are.

To know more about investing in the best options, download the Cube Wealth app or Speak to a wealth coach today.  


Shriram Shekhar
Shriram is a Consultant at CubeWealth. He has developed cutting edge IT products for over 2 years before turning to his passion for the written word. His love for philosophy, developing products, and empowering people through quality content is what got him to CubeWealth.

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