How to Invest in Gold for Beginners in India?

The very idea of Gold brings me the thought of Indian Jewellery. Gold is an excellent asset class when it comes to storing the value of money and hence popularly used as a hedge to inflation and rapidly changing foreign exchange rates.

I have one problem with Indians mindset, they want everything in physical form. Either Gold Bars, Gold Coins and even Worst as Jewellery. Why I said worst because of the incurred extra making charges and Taxes when purchased in physical form.

There are ways you can invest in Gold without incurring any tax or making charges and on top of that you can receive a interest for investing as well. Yes, I’m talking about Sovereign Gold Bond. Since, I’m a long term investor, I feel it’s prudent for me to invest through Sovereign Gold Bond route.

Various ways you can invest in Gold:

Sovereign Gold Bond (SGB)

Every 6 months Government Issues the Bond and one can invest up to 4 Kg of Gold value. At the time of redemption, one will get the future market price of Gold. Apart from the market appreciation the government provides an additional interest of 2.5%, paid half-yearly. A Sovereign Gold Bold bond is purchased for a Long Term (like 7 years, but can be withdrawn after 5 years too). Besides one can Trade SGBs on Trading Platforms just like Stock. You can buy and trade these bonds at Discount Brokers like Zerodha. These bonds are issued twice a year by RBI, the next issue date is nearby. Watch out.

Gold Bars and Coins

If you’re looking to buy physical Gold without any making charges. This is the best way to go. You can buy these from Jewellers, Banks, e-Commerce Websites, and NBFCs. Beware that it’s risky to store large amounts of Gold without a Theft Insurance.

Digital Gold

Allows you to invest in for as low as Rs. 10. There won’t be any making charges but there will be extra charges than buying the physical gold bars since, the company is buying Gold on your behalf and storing and insuring. Also when you buy and sell, you have to pay GST.

Gold ETFs (Exchange Traded Funds)

Gold Mutual Funds



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