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Beginner’s Guide to Investing in Gold in India

This blog will tell you all about investing in various forms of gold in India.
December 22, 2020

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The only thing that Indians love more than gold must be cricket. Gold, as an asset, holds tremendous monetary and cultural value in India. Indian investors love buying gold even though there are better investment options available.

Fun Fact: India holds 658 metric tonnes of gold reserves. But we’ll condense the perfect gold investment guide in 658 words! In the process, we’ll also tell you alternative ways of investing in gold.

Why Is Gold Such A Favourite Investment Option?

  1. Gold does have the potential to deliver long term returns.
  2. Getting a loan against gold is also quite simple since it’s a tangible asset with a high value. 
  3. Gold is an asset that you can easily buy or sell. The high liquidity could be a useful option in times of need. 
  4. Gold holds social and emotional value to many individuals, that's why they choose to invest in gold.
  5. Gold can be smelted into bars, coins, and jewellery. Some even smelt gold into vases, bowls, etc.

What Are the Different Ways of Investing in Gold?

There are multiple ways to invest in gold in India based on your goals and strategy. For example, you can walk down to a reputed jeweller or download the Cube Wealth app. Here’s a detailed look.

5 Best Ways to Invest in Gold 

1. Digital Gold

Digital gold is one of the most efficient ways to invest in gold. Physical gold comes with exorbitant making charges. This can be a problem if you’re buying gold purely for profits and not to wear it as jewellery. 

Digital gold does not carry this risk. Not just that, digital gold does not carry security or storage concerns that physical gold does. The easiest way to buy digital gold is by using the Cube Wealth app.

If you’re investing in digital gold using Cube, every gram of gold you buy is backed by 24K gold stored in a secure vault by Brink. 

Read more about it here. 

2. Gold ETFs


Gold Exchange Traded Funds (ETFs) carry a lower cost compared to physical gold. Gold ETFs invest in gold bullion and you can buy and sell them on the share market just like stocks.


3. Gold Bonds


You can buy Sovereign Gold Bonds at a fixed interest rate in grams up to 4 kgs per financial year. This investment option does come with a tenure of 8 years. Gold bonds can be sold on the stock exchange. 


There is an early exit option after 5 years. However, gold bonds don’t have a storage cost.


4. Gold Savings Schemes


This is like a SIP to purchase gold. You can deposit a fixed monthly amount to a jeweller over a fixed tenure. After that, you can purchase gold equivalent to the money you deposited from the jeweller. There’s no interest accumulated on the deposit. 


5. Jewellery


It’s a good way to invest in gold if you want to own it as an asset that you can wear. However, there are making charges involved that can increase the total expense.

 

Parameter

Digital Gold

Gold ETFs

Gold Bonds

Gold Savings Schemes

Jewellery

Liquidity

High

High

Low

Low

High

Returns

Moderate

Moderate-High

Moderate 

Moderate

Moderate

Risk

Moderate

High

Moderate

Moderate

High

Fixed lock-in tenure

No

No

Yes

Yes

No

Minimum investment amount

₹1000

1 unit = 1 gram of gold

1 gram of gold

₹1000

₹4000+

 

Why Should You Consider Investing in Gold?


Investors prefer to buy gold for several reasons but at the same time, it carries certain risks as well. Here’s a table that lists both. 

 

Pros

Cons

Hedge against inflation

Security concerns

High liquidity

Storage concerns

Easy to buy

Making charges


Is Investing In Gold A Good Idea?


Whether or not you should invest in gold would depend on your strategy and goals. If you want both profits and the option of wearing gold, then it may make sense to invest in gold.


However, if you want to invest in gold only as a long term wealth creation option alone, then digital gold or Gold ETFs could be the right fit for you. 


To know more about digital gold, speak to a wealth coach or download the Cube Wealth app 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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