Every Indian loves to possess gold and more than this, every Indian wish to invest in gold; because the possession of gold is a much-dreamt thing of everyone. Its value can never be ignored, as, in all times, we have been able to garner unmatched economic value from gold. It has always proved itself to be instrumental in paving the way through rough times.
Gold investments have always remained in the mainstream for ages. Traditionally also, people used to be bent upon making gold investments, if they had adequate and required capital. Traditionally, people focused on accumulating jewelry, gold accessories, gold bullions as well as gold coins. And with the onset of the Internet age, online gold trading in India, became even more crowd-pleasing, as the investments became easy-to-do things, something that depended on the role of clicks. Now people can switch themselves to gold ETFs (Exchange Traded Funds) or in the much-preferred gold funds.
How to Demarcate Between ETFs and Gold Funds?
When you are investing in gold ETFs, you don’t make the custody of gold physically. In fact, what you do is you actually speculate over the prices, you buy it by resorting to a fixed price that you attach to it. In addition to this, your trading in gold would also expect a Demat account from your side. Also, to make full use of them, you have to be ready to pay maintenance as well as brokerage fees.
This means that you would certainly have to face some paperwork. But the most attractive thing about them is that they are capable of putting a stop to any kind of gold robbery, that can happen in the case of attaining physical gold. Another important thing associated with ETFs is that the fluctuations in the market gold prices lead the ETF prices by the nose. And thus, we can say that risk factor is surely connected to them.
Here the investments are made directly with the gold mining firms. Also, a gold trader doesn’t have to have a Demat account, unlike the case with ETFs. However, something that would please a trader with gold funds is that the amount they charge for the maintenance of funds is meager or very little.
Also, just like ETFs, gold funds also expect paperwork to be finished from the side of the trader. And the best thing that can leave a gold trader super elated is that gold funds are not at all dominated by the market prices of gold. Thus, the risk of losing money on investing in them is zero.
Sovereign Gold Bonds
These bonds are considered to be the most trustworthy investments as they are provided by the one and only Reserve Bank of India (RBI). Every gold trader can find himself on cloud nine as this bank has a provision of 2.50% of the yearly interest that can be enjoyed by a gold trader. However, a trader must limit himself by having an investment not more than 4 Kg of gold. Moreover, this bond stretches itself to eight years, but one can have the choice of quitting with the onset of the fifth year. A plus point attached to it is that there is no brain whacking involved in basking in the ownership of gold.
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