Diwali means golden festival across the country. Many people buy gold at this time. Nowadays many people are interested in buying digital gold apart from jewellery. In that case many investors opt for gold exchange traded funds or gold bonds. Many may not know that customers get multiple benefits in these niche areas.
In 2015, the central government launched the gold bond scheme. Through this, an investor can invest in gold even if he does not have gold in hand. However, one cannot invest in this scheme at any time. A specific date for gold bond subscription is announced by the Reserve Bank. For example, this bond subscription was available from September 11 this year. The subscription period lasted until September 15. Many investors bought gold bonds at that time.
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Pricing and Investment
The gold bond is priced based on the average price of 99.9% pure gold over the last three business days prior to its launch. The value of the bond is based on the price of gold published by the India Bullion and Jewelers Association Limited for the last three days. If you invest in digital method, you get a discount of 50 rupees per village.
An investor can subscribe up to a maximum of four kilograms of gold in a financial year. However, in case of trust, this subscription amount is up to 20 kg. Gold bonds have a tenure of eight years. But after five years the investor can withdraw the money. The corresponding investor will be paid according to the value at that time. Besides, this scheme offers 2.50 percent interest.
Gold ETF (Gold Exchange Traded Fund)
Gold ETFs are another way to invest in gold digitally. Generally, the buyer has to pay additional charges while purchasing gold jewelry. But in case of ETFs this cost is much less. An investor has the opportunity to invest in gold ETFs at a price close to the actual gold price. Here the value of the ETF depends on the price of gold.
How to invest?
This investment requires the investor to have a trading account with a stockbroker. A demat account is also required. In this scheme an investor has the opportunity to invest even a very small amount of gold. Investing in ETFs does not require any separate charges. However, broker costs are incurred when buying or selling. Liquidity is also very high in this type of investment. That is, gold ETFs can be sold at will.
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