How to invest in gold in India – investment options and its benefits

India is one of the major consumers of gold. Every family in the country may not have anything but gold is definitely according to its capacity. In addition to buying gold jewellery for beauty, we have been buying gold to avoid economic crisis keeping in mind the future. Gold is an investment option whose demand is always in the market. It is also considered the safest investment option. It should be an important part of every investor’s portfolio. Indians rely most on investing in gold, as it gives good returns in the long run with a guarantee. So through this article, how do you invest in gold? Is it beneficial to invest in it? We are going to give information about its benefits etc.

Why should you invest in gold?

Investors often take into consideration aspects like security, liquidity and returns while investing. Investing in gold provides you with security and liquidity. Also, it always gives better returns to investors. Let’s look at some reasons and try to understand why investing in gold is beneficial –

  • Protected property – Gold can be preserved as a physical property and can be given from one generation to another. Also, gold is in tangible form, so there is less risk.
  • Liquid Assets – You can easily convert your gold into cash whenever needed. There is no paperwork or any intermediary required.
  • Investing in gold helps you avoid financial crisis. The price of gold is opposite to the equity market. It has often been observed that investment on gold performs well when the stock market falls.
  • If you have invested in gold, you do not have to worry about inflation, because the prices of gold have been continuously increasing for the last few years.

How to invest in gold?

Earlier investment in gold meant buying jewelery, jewelry or gold bullion. It is still in vogue today, but the forms of gold investment have changed over time. Now, apart from physical gold, people also invest in gold funds and gold EFT. Below are some ways with which you can invest in gold –

By buying gold – Buying physical gold involves buying jewelery, jewelry, gold coins etc. You may also get a loss if you buy jewelery, because its price includes the cost of making it. The main advantage of investing in physical gold is that you can buy it directly without any paperwork. For this you do not even need to open a demat account. But if you buy more gold than the limit within a year, then you have to provide your PAN card number.

Equity based Gold Fund – Through equity-based gold funds, gold is invested in bullion and companies involved in gold mining. You do not need to open a demat account to invest in these funds, but you have to pay the fund management fee. These funds are directly affected by changes in gold prices. They also depend on market volatility and equity-based risk. In such funds those investments should be made for those who want to get more profit by taking appropriate risks.

Gold EFT – Gold EFT is a type of mutual fund that invests in gold. Units of gold exchange-traded funds are listed on the stock exchange. To invest in these funds you need a demat account. For this, you have to pay the brokerage fee as well as the fund management fee. This type of investment is best suited for investors who have the necessary knowledge and skills in trading and the stock market.

What are the gold funds?

Gold funds are a type of mutual fund or exchange-traded fund, which invests primarily in gold bullion or gold producing companies. The main objective of these funds is to get higher returns from gold investment. There are many benefits of investing in Gold Fund, which are as follows –

  • Through this, investors can invest in gold and get better returns.
  • Investors can take advantage of this by buying and selling gold at potential prices without purchasing any physical gold.
  • This helps you diversify your investment portfolio.
  • This can be considered a safe investment option, as gold prices do not fluctuate like the stock market.