gold investment business plan in india

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Learn Mutual Funds Gold Investment Plans in India: Which One is Best for you?

Gold Investment Plans in India: Which One is Best for you?

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Gold has been a symbol of wealth since ancient times and even in the Information Age has managed to maintain its relevance as an investment. In its physical form, currently, around 190,000 tonnes of Gold are available globally out of which 50% is in the form of jewelry. An additional 17% and 13% of global gold reserves are held by Central Banks around the world and used for various industrial purposes respectively.

At present, the second most popular use of Gold worldwide that accounts for 20% of the world’s physical Gold are investments. These are held by individuals in the form of investments such as Coins, Bars, or as underlying assets of Gold Exchange Traded Funds, Gold Mutual Funds, or Digital Gold.

In this blog, we will discuss the key Gold investment options currently available in India and compare them based on key criteria such as availability, risk, return, cost, liquidity, etc. But first, let’s discuss why investing in gold is relevant in today’s world.

Why Should You Invest in Gold?

The primary reason for investing in Gold is portfolio diversification and in that context, it is considered to be an ideal hedge against the potential volatility of equity investments as well as inflation. Moreover, as shown in the chart below, investments made in Gold have in most cases provided good returns over the past 40 years:

In the above chart, you can see that Gold has on average provided annual returns of 9.6% over the past 40 years, and during that period, only 8 instances of negative annual returns were recorded.

Apart from the returns offered by Gold, another key reason for using it as a hedge is based on the fact that it has historically shown lower volatility than equity investments over the long term. In fact, in many cases, it has shown an inverse correlation to equities, i.e., returns of Gold have historically been high when equity markets have witnessed a downturn.

In the above graph, you can see a few key instances when Gold showed superb performance such as 1991-1993, 1999-2001, 2007-2010, and 2020. In each of these instances, Equity markets had corrected significantly due to various reasons such as the Indian Currency Crisis (1991-1993), Dot Com Bubble (1999-2001), Global Financial Crisis (2007-2010), and COVID-19 Pandemic (2020). Now that we have established  why you should invest in Gold  even in today’s world, let’s discuss the different ways how you can invest in Gold.

How to Invest in Gold: Gold Investment Plans in India

To invest in Gold you either opt for the physical form or the digital form. In its physical form, Gold as an investment can be held in the form of jewelry, coins, bars i.e. bullion, etc. There are, however, a few key limitations of investing in physical gold:

• Making/designing charges make purchases expensive
• Storage expenses are applicable due to security and insurance requirements
• Selling is inconvenient due to possible impurities and the requirement of origination and purity certificates

To overcome the limitations of physical gold, you can opt for the digital route which includes investments such as Digital Gold, Gold ETFs,  Gold Mutual Funds , and Sovereign Gold Bonds. The following is a short description of each of these investment options:

• Digital Gold:  These can be purchased through various apps in denominations starting from 1 gram onwards.
• Gold ETFs:  Gold Exchange Traded Funds are traded on stock exchanges just like shares and primarily feature Physical Gold and stocks of Gold mining/refining as the primary underlying assets. A Demat (Dematerialised) Account is mandatory for investing in Gold ETFs.
• Gold Mutual Funds:  These are mutual funds managed by various asset management companies (AMCs) that follow a fund-of-fund structure and primarily invest in Gold ETFs. You can invest in most Gold Mutual Funds through the ETMONEY App.
• Sovereign Gold Bonds:  These bonds are periodically released by the Reserve Bank of India (RBI) and available for purchase through leading public and private sector banks. While returns are pegged to the price of gold and guaranteed by GOI, they actually do not have physical gold as an underlying asset.

Do keep in mind that while the performance of all the above examples of Gold as an investment is linked to the price of Gold, there are significant differences between them in terms of risk, returns, availability, liquidity, lock-in period, and taxation. Let’s discuss these aspects of Gold investment options in detail starting with risk.

Key Risks of Investing in Gold

Like any type of investment, Gold as an investment is also prone to various risks which vary from one investment option to another. The following are the key risks associated with each of these investments:

• Digital Gold lacks regulatory oversight because it does not have a regulatory body such as SEBI or RBI as of yet. Moreover, there are currently only 3 players who dominate this market in India – Augmont Gold, MMTC-PAMP India, and SafeGold, which also increases the overall risk of the investment.
• Gold ETFs and Gold Mutual Fund share the same risk – market risk due to the potential volatility of gold prices. This is because, in the case of both instruments, the underlying asset is primarily Physical Gold. For example, Gold ETFs invest either in Physical Gold or in the stocks of companies engaged in mining/refining gold. Thus an increase or decrease in the price of Gold impacts the performance of Gold ETFs.  Gold Mutual Funds follow a Fund of Fund structure and primarily invest in Gold ETFs thus Physical Gold and stocks of Gold mining/refining companies become the underlying asset for these schemes. At present, both these financial products are regulated according to the guidelines of SEBI.
• The sovereign default risk applicable to Sovereign Gold Bonds is due to the fact that this instrument is not backed by physical gold and is instead a derivative of Gold issued by the Government of India through the Reserve Bank of India (RBI). In this case, the Government uses the price of gold as a benchmark and issues the bonds that guarantee periodic interest payments (at 2.5% p.a.) along with investment value at maturity. A sovereign default in this case refers to a situation where the Government of India is no longer able to make scheduled repayments on its outstanding debt. This situation can typically occur when a country’s debt levels are very high and there is a simultaneous economic downturn in the country. But at the moment, there is very little chance of this happening in India.

Next, let’s compare these investment options based on minimum investment amount to determine their affordability for investors.

Minimum Investment Requirements

The minimum investment requirement differs from one Gold investment option to another and plays a key role in ensuring affordability, especially for new investors. The following table sums up the minimum investment requirements for different instruments:

From the above table, you can see that the entry point when making investments is lowest in the case of Digital Gold and Gold Mutual Funds while Sovereign Gold Bonds, Gold ETFs, and Physical Gold require significantly higher minimum investment amounts.

Comparison of Returns and Costs of Gold Investment Options

In case you are opting for gold as an investment, returns generated from the investment are inversely correlated to the cost of making the investment i.e. lower costs lead to higher returns and vice versa.

The reason for this is because the underlying asset is the same i.e. the price of gold – an increase in price would lead to an appreciation of your investment, while a decrease in price can potentially lead to a loss. The following are the costs associated with each investment:

In the cost section for Digital Gold, you will see the term “ Spread ”.  This “Spread” is the difference in the buying and selling price for the investor. In practice, the price of buying Digital Gold is approximately 6% higher than the selling price offered by platforms that sell Digital Gold . This spread is implemented in order to recover costs associated with physical gold such as secure vault storage cost, technology costs, hedging costs, insurance, transportation cost, etc.

Sovereign Gold Bonds do not have any visible expenses primarily because they are a derivative product guaranteed by the Government of India and not backed by physical gold.  In fact, there is currently a Rs. 50 per gram discount for online purchase of these sovereign bonds. Moreover, this investment guarantees fixed interest of 2.5% annually which is credited directly to the investor’s bank account. In view of these factors, Sovereign Gold Bonds does seem to be the most profitable way to invest in Gold. That said, just as in the case of other investments, you do need to consider the aspects of availability which we will discuss next.

Availability of Gold Investment Options

Availability refers to the ease with which an investor can purchase an investment and also if there are any restrictions that might affect an investor’s ability to invest in the product.

In most cases, Digital Gold, Gold ETF, and Gold Mutual Funds are readily available for purchase through the appropriate channels. In this regard, Sovereign Gold Bonds are a bit different – these bonds are released every 1 to 2 months by the RBI and typically this buying window is open for 5 days. Apart from availability, which determines how easily you can invest, you also need to consider how easy it would be to liquidate i.e. monetize your investment, so we will discuss this next.

Liquidity of Gold Investment Options

With respect to investments, liquidity typically refers to the ease with which they can be bought and sold.

• Physical gold, digital gold, gold ETF, and gold mutual funds can be bought and sold quite easily. Hence, they can be considered as liquid investments.
• You can prematurely encash the bonds after 5 years, i.e., after completion of the lock-in period. In case you want to redeem your investment before the completion of this 5-year period, you have the option of listing and selling your sovereign gold bond in the secondary market. This can be done at any time after the completion of 6 months from the date of issue. However, the secondary market has low volumes, so you might have to sell your bonds at a discount as compared to the market price of gold.
• In case you are looking for an option to monetise your investment that does not involve selling or premature encashment, you can opt for a loan against your bonds. For example, SBI offers a loan against sovereign gold bonds for amounts of up to 35% of the value of the bonds used as collateral.

The final factor that we need to consider in our evaluation is the taxation of gold investment options, so let’s talk about that.

Taxation of Gold Investment Options

Primarily, gold investments are taxed at the time of selling or at the time of maturity. Capital-gains taxation rules are applicable in the case of physical gold, digital gold, gold ETFs, and gold mutual funds. Depending on the holding period of your investment, i.e.,the time period between the purchase and sale of your investments, either short-term capital gains (STCG) or long-term capital gains (LTCG) rules may be applicable. If the holding period of these investments prior to redemption/sale is up to 3 years or shorter, the gains are classified as STCG. If the holding period is greater than 3 years, LTCG applies. The following table summarises how different investment vehicles are taxed.

From the table, we can see that if you invest in digital gold or physical gold, then your holding period decides if STCG or LTCG will apply. If your holding period is less than 3 years, then STCG will apply, and the gains will be taxed as per your income tax slab. However, If the holding period is more than 3 years, then LTCG will apply, and your gains will be taxed at 20% post the indexation benefit.

If you invest in gold funds or gold ETFs, then irrespective of your holding period, gains are taxed as per your tax slab. In the Finance Act 2023, the indexation benefit which was earlier available to gold funds/ETFs was removed due to which gold funds/ETFs now are taxed as per tax slabs irrespective of the holding period.

The taxation of sovereign gold bonds is a bit different. There are 4 possible ways that your investment may be taxed and they are as follows:

• Taxation on interest: The interest earned from sovereign gold bonds (currently 2.5% p.a.) is entirely taxable. It is added to your income for the applicable FY and taxed according to the applicable slab rate.
• Taxation on premature redemption: In case you prematurely encash your investment after the completion of 5 years, the gains are entirely tax-free. The RBI typically offers redemption windows every 6 months after completion of the 5-year lock-in that can be utilised for premature encashment.
• Taxation on maturity: In case you hold your sovereign gold bonds till maturity and encash them after the completion of the 8-year holding period, your gains from the investment will be tax-free.
• Taxation on secondary-market sale: In case you redeem your bonds through the secondary market, you will be taxed according to the capital-gains taxation rules. If you sell the bond before three years, the gains will be added to your income and taxed as per the slab. If you sell it after three years, the tax rate is 20% post indexation. Thus, either STCG or LTCG tax rate will apply to your investment depending on the holding period of the bonds.

From the above discussion, you can see that each of these gold investment options comes with its own unique set of features and benefits. In the following section, we will discuss our key takeaways as well as some key tips to help you decide which one is most suitable for you.

Bottom Line

After comparing the risk, minimum investment requirements, returns, costs, liquidity, availability, and taxation rules of different gold investment instruments in India, the following are our key takeaways:

• Sovereign gold bonds are the most suitable choice if you plan to stay invested for an extended period (5+ years). Not only will you receive regular interest payouts while you stay invested but you will also have the option of making tax-free redemptions after staying invested for at least 5 years. Lastly, the redemption of these bonds at maturity i.e. after completion of 8 years, is also tax-free.
• For short-term investment physical gold and digital gold might look attractive options. However, they are not recommended as they are not regulated by any government authority and they have significantly high buy-sell spreads. This means when you buy you will need to pay more than the prevailing gold price and when you sell, you will get less. So, if you wish to take a tactical bet in gold and capture an 8-10% rise in gold like the one we saw in the month of April 2023, then they are not an ideal choice as the costs (GST + spread) will reduce your returns.
• In case you are looking to stay invested in gold for the short term, i.e., no more than 3 years, you can opt for gold mutual funds or gold ETFs, which have high liquidity and availability. Even after the recent change in the taxation of gold funds and ETFs, they are a better option because if you wish to invest for the short term (less than 3 years) or take a tactical bet in gold, then the taxation rule is the same as the other options (digital/physical gold). Moreover, the other options are also not recommended due to the high costs (GST + spread) associated with them.

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Gold Investment in India – How to Invest, Options, Benefits

Updated on : Jan 13th, 2022

22 min read

Gold  is one of the most preferred investments in India. High  liquidity  and  inflation -beating capacity are its strong selling points, not to mention charm, prestige, and so on. Gold prices shoot up when the markets face turbulence. Though there are phases when markets witness a fall in gold prices, it won’t last for long, and always makes a strong comeback. This article covers the following:

Why Should You Invest in Gold

Safety, liquidity, and returns are the three criteria most risk-averse investors look for before investing. While gold meets the first two criteria without any hiccups, it doesn’t perform poorly at the last one either. Here is why you should invest in gold:

a. Investing in gold is worthwhile because it is an inflation-beating investment. Over time, the return on gold investment has been in line with the rate of inflation.

b. Gold has an inverse relation with equity investments. For example, if the equity markets start going down, gold would perform well. Considering gold as an investment option in your investment portfolio will be a buffer to the overall volatility of your portfolio.

How to Invest in Gold

The ‘golden question’ here is – how does one invest in gold? Traditionally, it was by buying physical gold in the form of coins, bullions, artefacts, or jewellery. However, there are newer forms of gold investments nowadays, such as  gold ETFs  (exchange-traded funds) and gold mutual funds.

Gold ETFs are similar to buying an equivalent sum of physical gold but without the hassles of having to store the physical gold. Hence, there is no risk of theft/burglary as the gold is stored in  Demat  (paper) form. Gold funds involve investing in gold mining companies.

Let’s understand different ways of investing in gold from the following table:

What are Gold Funds

By investing in gold funds, you invest in stocks of companies operating in gold and gold-related activities. Gold mutual funds include silver, platinum, and other metals in their investment basket. A mutual fund manager on behalf of an asset management company manages the gold fund, unlike gold ETFs. They make use of the fundamental trading analysis to buy and sell stocks to maximise returns for investors. Returns from gold funds depend on market conditions to an extent. Gold mutual funds eliminate the risk of returns considerably by distributing investments over a wide range of investment options. In other words, mutual funds work on the principle of diversifying, i.e. not putting all eggs in one basket. Investors need to weigh their risk appetite and goals before choosing such a mutual fund.

Gold Investment vs Mutual Funds

All investments have their own set of pros and cons. Investing in physical gold needs safety and security to preserve the same from theft. Investing in gold comes with a bunch of disadvantages; the other viable investment option that one can consider is  mutual funds . They are also more tax-efficient as compared to traditional investments, and have the potential to provide much higher returns when the markets are favourable.

Frequently Asked Questions

How to invest in mutual funds in india.

You can invest in mutual funds directly with the asset management company (AMC) through the direct plan. You must complete your KYC at a KRA (KYC Registration Agency) online by filling the KYC registration form and uploading the self-attested identity proof such as PAN Card and address proof such as Passport/Driving License/Voter ID and also a passport size photograph. You will also have to complete the IPV (In-Person Verification). You may also invest in mutual funds through a mutual fund distributor by opting for a regular plan. The mutual fund house would pay a commission to the mutual fund distributor or the intermediary. You may invest in mutual funds offline by visiting the mutual fund house and filling up the application form and submitting documents for KYC compliance.

How to invest in mutual funds online in India?

You may invest directly with the mutual fund house through the direct plan. You just have to visit the website of the fund house and fill up your relevant details such as name, email id, mobile number and bank details. You may complete the KYC online through eKYC where you enter the Aadhaar and PAN details. Your information would be verified at the backend and you may start investing in mutual funds after transferring money online from your bank account. You may also invest through an online platform such as Cleartax Invest .

• You must log on to cleartax invest
• You then select the mutual fund house from the list of fund houses
• Pick the mutual fund scheme based on your investment objectives and risk tolerance and click on Invest now
• You must select the amount you plan to invest in the mutual fund scheme and the mode as either One Time or Monthly SIP
• You must fill up the requisite details such as name, email ID, mobile number and complete the transaction

How to invest in mutual funds for beginners in India?

You must choose the appropriate mutual fund scheme based on investment objectives and risk tolerance, if you are a beginner in mutual funds. You may invest in mutual funds online or offline as per your convenience. You may invest in mutual funds offline in a direct plan of a mutual fund scheme by visiting the branch of the fund house. You can invest in a regular plan through a mutual fund distributor. You may invest in direct plans of mutual funds online by visiting the website of a fund house. You may complete your eKYC for KYC (Know Your Customer) compliance by submitting Aadhaar and PAN details and then invest in the scheme of your choice. You could complete your KYC at a KRA (KYC Registration Agency) before investing in mutual funds.

How to invest in mutual funds without a Demat account?

You may invest in mutual funds directly with the mutual fund house by visiting the branch of the AMC. You just have to fill up the application form and submit the self-attested identity and address proof for KYC compliance. You may submit the cheque for the initial amount and you are allotted a PIN and folio number. You can also approach a mutual fund distributor and invest in the regular plan of the mutual fund. You may invest in a direct plan of a mutual fund online through an AMC. You must fill up the registration form and complete your eKYC by submitting PAN and Aadhaar details. You may also invest in an online portal such as Cleartax Invest .

How to invest in mutual funds directly?

You may invest in mutual funds directly by visiting the office of the mutual fund house. You must submit your self-attested identity and address proof along with the filled application form and passport size photographs for KYC-compliance. Make a cheque for the first investment and invest in the mutual fund scheme of your choice.

How to invest in direct mutual funds online in India?

You may invest in direct mutual funds online by visiting the website of the mutual fund house. You may fill in the application form and complete your eKYC by submitting your PAN and Aadhaar details. The AMC would verify your details and you may invest through your online bank account. You may invest in direct mutual funds online in India through the online portals such as Cleartax Invest .

How much to invest in mutual funds per month?

You may invest in a mutual fund scheme through a systematic investment plan or SIP. It is a method of investing in a mutual fund where you invest a fixed amount regularly in a mutual fund scheme of your choice. You may invest as low as Rs 500 per month through the SIP in the mutual fund scheme of your choice.

How to invest in mutual funds without a broker?

You may invest in a direct plan of a mutual fund either offline or online directly through the asset management company or AMC. You may visit the branch of the fund house and fill up the mutual fund application form and submit the self-attested identity and address proof along with a passport size photograph to complete your KYC. You may invest in a direct plan of a mutual fund online by visiting the website of the AMC. You may fill the mutual fund application form with required details such as name, bank details and complete your eKYC by submitting your PAN and Aadhaar details. You may invest in mutual funds through your online bank account. You may invest in mutual funds through an online portal such as ClearTax Invest .

• Log on to cleartax invest
• Select the mutual fund house from the list of fund houses
• Select the amount you plan to invest in the mutual fund scheme and the mode as either One Time or Monthly SIP.

How to invest in equity mutual funds?

You may invest in a direct plan of an equity fund directly through the asset management company (AMC). You may visit the branch of the fund house and fill up the mutual fund application with required details such as name, mobile number and bank details. Complete your KYC by submitting the self-attested identity and address proof and submit passport size photographs. You may submit the cheque for the initial amount and you are allotted a PIN and folio number. You can also approach a mutual fund distributor and invest in the regular plan of the mutual fund. You may invest in equity funds online by visiting the website of the mutual fund house. You may fill in the application form online and complete eKYC with PAN and Aadhaar details. Start investing in the mutual fund scheme with your online bank account.

How to invest in mutual funds through SIP online?

• You must first complete your KYC before investing in a mutual fund. You may do so at a KRA (KYC Registration Agency) online by filling the KYC registration form and submitting the self-attested identity and address proof.
• You then visit the website of the fund house and choose the mutual fund scheme of your choice.
• You may fill an application form with required details such as name, mobile number, PAN and create a username and password.
• You then enter your bank account details and set up the SIP auto-debit amount.
• You may log on to your account created at the fund house and choose the mutual fund scheme.
• You must make the first SIP instalment online and the next instalment after 30 days. (The AMC will intimate you on the requisite date).
• You may continue the SIP till the end of the chosen tenure. (You may decide the tenure of the SIP).

What are mutual funds and how to invest in them?

Mutual funds are a professionally managed investment where the money is pooled by several investors and used to purchase securities. It may invest your money in equity, debt or a mix of both equity and fixed income depending on the type of mutual fund. You may invest in the direct plan of mutual funds directly through the AMC both offline and online. You may also invest in mutual funds through a mutual fund distributor.

How to invest in US mutual funds in India?

You may invest in US mutual funds through fund of funds (FoFs) schemes with a mutual fund house in India. It is an indian mutual fund scheme that invests in US- based active equity mutual funds. However, they have a higher expense ratio as compared to most equity schemes. You may also invest in indian equity schemes whose portfolio mimics a US stock market index such as S&P 500 or the Nasdaq 100. You may invest in these fund of funds schemes through an asset management company in India. You could consider completing your KYC before investing in US mutual funds from India.

How to invest a lump sum in mutual funds?

You may invest a lump sum amount in a mutual fund through a direct plan with the asset management company. You could opt for the offline or online mode of investment. You must complete your KYC by submitting a self-attested identity and address proof along with passport size photographs at the branch of the mutual fund house. You could invest a lump sum amount in mutual funds through an online platform such as cleartax invest. You just have to log on to cleartax invest and select the mutual fund house and the scheme. You then select the amount and the mode of investment as One Time if you want to put a lump sum amount in a mutual fund.

How to invest in mutual funds through demat account?

You may invest in mutual funds through a demat account with your stock broker or through any depository participant. The mutual fund units would be held in the dematerialised form. You can buy and sell mutual fund schemes through your demat account just like shares. It is a dematerialized account which can hold stocks, mutual funds and other securities.

• Open a demat and trading account with a stock broker
• You can buy and sell units of mutual fund schemes
• However, charges are higher as compared to other modes of investing in mutual funds

How to invest in debt mutual funds?

You may invest in direct plans of debt funds directly with an AMC. You could visit their branch office and fill the application form. You then complete the KYC by submitting the self-attested identity and address proof and passport size photographs. You may invest in direct plans of debt mutual funds online by visiting the website of the AMC.

• Create an account with the AMC
• Complete your eKYC by submitting PAN and Aadhaar details
• Specify the amount you want to invest and the frequency of your investment
• You may give online instructions to your bank to transfer the requisite amount to the fund house on a specified date.

You may invest in debt funds through an online platform such as Cleartax Invest . You have to log on to cleartax invest and pick the mutual fund house and the debt scheme. You then select the amount and the mode of investment as One Time or SIP to commence investing in the debt fund.

How to invest in elss mutual funds online?

You may invest in regular plans of ELSS through a mutual fund distributor. You can invest in the direct plan of the ELSS mutual fund online directly with an AMC. You must create an account with the AMC. Fill up the application form with personal details such as name, mobile name and so on. You may complete your eKYC by submitting your PAN and Aadhaar details. You may give online instructions to your bank to transfer the requisite amount to the fund house on a specified date and start investing in the ELSS mutual fund. You may invest in ELSS mutual funds online through online platforms such as Cleartax Invest .

• Log on to cleartax invest.
• You must pick the mutual fund house from the list of fund houses
• Select the ELSS mutual fund scheme based on your investment objectives and risk tolerance and click on Invest now
• Select the amount you plan to invest in the ELSS mutual fund scheme and the mode as either One Time or Monthly SIP

How to invest Rs 500 in mutual funds?

You may invest in direct plans of mutual funds either online or offline. You must complete your KYC before investing in mutual funds. However, you may invest in regular plans of mutual funds through a mutual fund distributor. You may consider investing just Rs 500 per instalment in an SIP of a mutual fund. It is a method of investing regularly in a mutual fund scheme of your choice.

How to invest in large cap mutual funds?

You may invest in direct plans of large cap mutual funds either offline or online by investing directly with the AMC. Complete your KYC by submitting self-attested identity and address proofs or eKYC for online mode. You could invest in regular plans of large cap mutual funds through a mutual fund distributor. You may invest in large cap funds through online platforms such as Cleartax Invest .

• You must opt for the mutual fund house from the list of fund houses
• Select the large cap mutual fund based on your investment objectives and risk tolerance and click on Invest now
• Select the amount you plan to invest in the large cap fund and the mode as either One Time or Monthly SIP

How to invest 1 crore in mutual funds?

You may invest Rs 1 crore in a direct plan of a mutual fund. You may invest online or offline directly with the AMC. However, you must complete your KYC before investing Rs 1 crore in the mutual fund. You may invest Rs 1 crore in mutual funds through an online platform such as cleartax invest. You just have to log on to cleartax invest and select the mutual fund house and the scheme. You then select the amount and the mode of investment as One Time if you want to put a lump sum amount in a mutual fund. However, it would be prudent to invest in mutual funds through SIP instead of putting Rs 1 crore through a one time investment. It is a method of investing small amounts regularly in a mutual fund scheme of your choice.

How to invest in money market mutual funds in India?

You may invest in direct plans of money market mutual funds either offline or online by investing directly with the AMC. You must complete your KYC by submitting self-attested identity and address proofs. You must complete eKYC for the online mode of investing in money market mutual funds by submitting PAN and Aadhaar details. You could invest in regular plans of money market funds through a mutual fund distributor. You may invest in money market mutual funds through online platforms such as Cleartax Invest .

• Select the money market mutual fund from the category of debt funds based on your investment objectives and risk tolerance and click on Invest now
• Select the amount you plan to invest in the money market mutual fund and the mode as either One Time or Monthly SIP.

How to invest in STP mutual funds?

A systematic transfer plan or STP allows you to periodically transfer (switch) a certain amount of units from one mutual fund scheme to another mutual fund scheme of the same mutual fund house. You may consider an STP from an equity scheme to a debt scheme or vice versa depending on the market conditions. You may invest in STP in mutual funds through the following steps:

• You may fill up your STP form and submit it at the office of the AMC. You could fill this form online at the website of the mutual fund house.
• Select the mutual fund scheme (destination fund) where you intend to invest for the long-term.
• You may then select the mutual fund scheme (source fund) where you want to invest the lump sum amount.
• You may choose the time-frame from where the lump sum amount invested may be moved to the destination fund. You can choose daily, weekly or monthly STPs according to your convenience.

How much money do you need to invest in mutual funds?

Systematic Investment Plan or SIP is a method of investing in mutual funds. You may invest a fixed amount regularly in a mutual fund scheme of your choice. You can invest just Rs 500 per instalment in a mutual fund through the SIP.

How to invest in mutual funds in the name of minors?

You can invest in mutual funds in the name of a minor child. The minor child is the sole holder in the mutual fund folio. The guardian for the mutual fund folio must be a parent or a court-appointed guardian.

• You may approach the branch of an AMC.
• Submit documents showing the child’s date of birth such as passport or birth certificate while opening a mutual fund folio. You also need documents to establish the relationship between the minor child and the parent/guardian. (For parent it could be the passport and for the guardian it is the copy of the court order)
• The parent/guardian must be KYC-compliant to invest in mutual funds in the name of minor child
• You can even register an SIP or STP instruction in the mutual fund folio of a minor child. However, it would cease once the minor child turns 18 years of age.

How to invest in mutual funds for the short term?

You may consider investing in mutual funds depending on investment objectives and risk tolerance. Invest in debt funds to meet your short-term financial goals. You can invest offline or online in direct plans of debt mutual funds with the mutual fund house. However, you may invest in regular plans of debt funds through a mutual fund distributor. You can invest in debt funds through an online platform such as cleartax invest.

How to invest Rs 10,000 in mutual funds?

You can invest in mutual funds offline or online through a mutual fund house or an intermediary (broker). You may also invest in mutual funds through an online platform such as Cleartax Invest .

• Log on to cleartax invest to put Rs 10,000 in mutual funds
• Select the mutual fund scheme based on your investment objectives and risk tolerance and click on Invest now
• Select the amount you plan to invest in the mutual fund and the mode as One Time to invest Rs 10,000 in mutual funds.

How to invest in gold through mutual funds?

You may invest in Gold ETFs or gold funds either online or offline directly with a mutual fund distributor. You can also invest in these funds with the help of a mutual fund distributor. However, you may consider investing in gold funds or Gold ETFs through the SIP route. You may invest just Rs 500 per instalment. You can invest in Gold ETFs and gold funds through online platforms such as cleartax invest.

How to invest in mutual funds for retirement?

You may invest in equity funds or ELSS mutual funds for retirement. You must invest in equity funds for the long-term to achieve long-term financial goals such as retirement planning. You may invest in direct plans of equity funds and ELSS through an asset management company. However, you could consider investing through a broker for regular plans of these mutual funds.You could invest in equity funds and ELSS through online platforms such as cleartax invest.

How much to invest to get 3,00,000 in 3 years in mutual funds?

You may invest a lump sum amount in mutual funds or even through the SIP route. You can invest just Rs 500 per instalment in the mutual fund scheme of your choice through the SIP. Consider using ClearTax Mutual Fund Returns Calculator to determine how much to invest to get Rs 3,00,000 in 3 years.

How to invest in mutual funds in Canada?

You may consider investing in a fund of funds that puts money in Canadian mutual funds. You may approach a mutual fund house which offers the requisite facility.

How to invest in International Mutual Funds?

You may invest in International Mutual Funds directly through an AMC in India. It is an Indian mutual fund scheme which invests in stocks of foreign companies. However, you may consider the fund of funds schemes which invest in foreign mutual funds or whose portfolio mimics a stock market index such as the Nasdaq 100 or S&P 500. You can invest in International Mutual Funds through an online platform such as Cleartax Invest .

• Select the International Mutual Fund under the category ‘Equity’ based on your investment objectives and risk tolerance and click on Invest now
• Select the amount you plan to invest in the mutual fund and the mode as One Time or SIP.

How to invest in mutual funds as a student?

You can easily invest in mutual funds if you are a student above 18 years of age. You may invest in direct plans of mutual funds through the AMC. You can also invest in regular plans of mutual funds through a broker. However, you must complete your KYC by submitting a self-attested identity and address proof and passport size photographs at the branch of the mutual fund house. You may complete eKYC online by submitting your PAN and Aadhaar details before investing in mutual funds.

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• Gold Investment in India 2022: The Ultimate Guide  

Gold Investment in India 2022: The Ultimate Guide

Historically called the “Sone ki Chidiya” translating to a Bird of Gold, India has always had a sense of global pride. Gold as an entity is placed in high regard as an investment vehicle. In this article, we will go through an involution of Gold Investment in India from an NRI perspective.

We will cover the following topics:

• Gold Investment

Gold Rate Trend in India through the years

Gold investment advice, how to invest in gold in india: best gold investment plans, what are sovereign gold bonds, top gold funds in india, documents you need, taxation on gold investments in india, is investing in gold a good idea in india.

Gold Investment in India 2021

Amidst the plethora of elements, Gold is often sought after for investments given their high liquidity and inflation beating capacity. Investments in gold can be done in various forms such as buying Jewellery, Bars, Coins, Gold Funds, Exchange-Traded Funds (ETFs), Sovereign Gold Bond Scheme (SGBS), etc.

The market trend with respect to gold in India makes it a premium investing opportunity for NRIs. Let’s dig into the historical growth of gold rates in India and understand why gold investment in India is one of the best investment vehicles.

The rate of growth of gold rates in India evidently highlights the potential of gold investments in India. NRIs from all over the globe can invest in gold and benefit from the exponential growth in its rate over the years.

Comparing the spikes and the falls in the rates throughout the years it can be observed that investing in gold is safer when compared to other risky equity based asset classes . Assessing the metrics, NRIs can easily derive their own Gold Investment Calculator and predict their returns. 

Now, that you have made up your mind, let’s address the next question that comes in the mind of every NRI, which is:

Times are changing! The conventional methods to invest in gold includes buying jewellery, bars, billions, coins or artifacts. But now, NRIs can invest in gold through Gold ETFs and Gold Funds.

Gold ETFs or Exchange Traded Funds is similar to buying actual gold but you don’t buy the gold physically. The gold is stored in paper form in your demat account . Whereas Gold Funds deal with investments in various gold mining companies.

Let’s understand these investment methods through a quick compare and contrast:

Another method to invest in gold is through Sovereign Gold Bonds. Let’s understand what they are:

If you are inclined towards buying gold digitally, Sovereign Gold Bonds (SGB) are the safest option. They are issued by the Reserve Bank of India on behalf of the Government of India with an assured interest rate of 2.50% per annum. The bonds are basically denominated in units of 1gm with a maximum investment limit of 4 kg. The Sovereign Gold Bonds have a tenor of 8 years with exit options from 5th year onwards. These bonds are another way of investing in gold without buying actual gold physically.

Note: NRIs aren’t allowed to invest in SGB. However, if an NRI had invested in SGB while they were a Resident, they can hold it till early redemption/maturity.

NRIs, in the next segment we will browse through some of the top golf funds in India you can consider investing in.

• Axis Gold Fund
• Aditya Birla Sun Life Gold Fund
• Canara Robeco Gold Savings Fund
• HDFC Gold Fund
• ICICI Pru Regular Gold Savings Fund
• PAN Card for investments in Gold above Rs. 2 Lakhs
• For ETFs, you need an account with a brokerage firm along with a demat account with the same firm
• For Sovereign Gold Bonds (SGBs), the KYC Requirements include documents needed for buying physical gold (Aadhar Card, Voter ID or Passport)

After exploring the mediums to buy gold, we must consider the taxation on buying and selling of gold from all the mediums we discussed above.

The taxation on gold investments in India is different for the different mediums chosen for investment. GST (Goods and Services Tax) is applicable while buying gold and the taxation with respect to selling the gold in your possession is dependent on the different mediums you hold the gold in. Let’s explore:

• Tax on buying Gold: Purchase of gold is charged with a 3% GST along with making charges, if any
• Tax on sale of Gold: Income tax from sale of gold is calculated on the grounds of how many days you had them in possession. It is taxed on short-term and long-term. The minimum holding period for gold is 3 years. If you sell the gold in 3 years after buying it, the taxation will be done on a short term basis and if the gold is sold after 3 years, it will be taxed on a long term basis.

Taxation on gains from sale of physical gold, Gold ETFs and Gold Bonds is the same, which is:

Note: The Capital gains arising from the redemption of Sovereign Gold Bonds (SGBs) are exempted from tax. Also, indexation benefit is provided to Long Term Capital Gains arising to any person on transfer of bonds.

In the next and the final segment, let’s understand whether investing in gold is a good idea and why should an NRI do that. 

Before answering this, let’s understand the motives behind investing in general. Not only NRIs, but why do people invest in general? The basic outcomes that they look for are ROI (Returns on Investments) and Liquidity.

Now, gold as we have already established has inflation-beating capabilities and is a good investment option when considered liquidity, which simply means that you can get instant funds by exchanging gold. Every investment method has its own merit and demerit. Investments in stocks , mutual funds etc will give you the benefit of returns in forms of interest and dividends. But the liquidity factor associated with gold overpowers the returns sometimes.

This can be understood in very simple words, if you are looking to invest for emergency funds and liquidity is your main focus, investing in gold in India is advantageous. Moreover, in the entire article we established that the advantages of investing in gold outperform the disadvantages with an option to invest digitally. It’s entirely on your discretion if you want to invest in physical gold or in other non-physical alternatives like ETFs, Gold Funds and SGBs.

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Top Gold Mutual Funds in India: A Guide for Gold Investors [2024 Updated]

Gold has long been a sought-after asset for investors seeking stability and diversification in their portfolios. With the advent of gold mutual funds, investing in this precious metal has become more accessible and convenient than ever before. In this article, we will delve into the top gold mutual funds in India, analyzing their performance, key metrics, and benefits, to help investors make informed decisions.

Understanding Gold Mutual Funds

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Before we explore the top gold mutual funds in India, let’s first understand what they are and how they work.

What are Gold Mutual Funds?

Gold mutual funds are investment vehicles that pool money from multiple investors to purchase gold-related assets, such as physical gold, gold ETFs, or shares of gold mining companies. These funds are managed by professional fund managers who make investment decisions on behalf of the investors.

Benefits of Investing in Gold Mutual Funds

Investing in gold mutual funds offers several advantages, including:

• Professional management by experienced fund managers
• Diversification across various gold-related assets
• Cost-effectiveness compared to buying and storing physical gold
• High liquidity, allowing investors to easily buy or sell fund units
• Convenience of gaining exposure to gold without the hassle of physical storage

Top Gold Mutual Funds in India

Now, let’s take a closer look at some of the top gold mutual funds in India and their performance metrics.

1. Nippon India Gold Savings Fund

• 1-Year Return: 19.57%
• 2-Year Return: 18.85%
• 5-Year Return: 16.57%
• Current NAV: As on 17 May 2024 – Rs. 28.7292
• Assets Under Management (AUM): Rs. 1,842 Crores as of 31/03/2024

The Nippon India Gold Savings Fund is one of the top-performing gold mutual funds in India, offering investors consistent returns over various time horizons. With a well-diversified portfolio and experienced fund management, this fund is a popular choice among investors seeking exposure to gold.

2. SBI Gold Fund

• 1-Year Return: 19.63%
• 2-Year Return: 19.09%
• 5-Year Return: 16.08%
• Current NAV: As on May 17, 2024 – ₹ 21.9049
• Assets Under Management (AUM): As of 30 Apr 2024 – ₹1816.28Cr

The SBI Gold Fund is another top contender among gold mutual funds in India. With a strong track record of returns and a sizeable AUM, this fund has gained the trust of many investors. The fund’s investment strategy focuses on delivering long-term growth while minimizing risk.

3. Kotak Gold Fund

• 1-Year Return: 19.4%
• 2-Year Return: 18.77%
• 5-Year Return: 16.8%
• Current NAV: Rs. 30.31
• Assets Under Management (AUM):₹ 1,834 Cr. As on 30-Apr-2024

The Kotak Gold Fund has consistently delivered impressive returns to its investors. With a well-balanced portfolio and a focus on long-term wealth creation, this fund has become a preferred choice for investors seeking exposure to gold.

4. HDFC Gold Fund

• 1-Year Return: 18.81%
• 2-Year Return: 18.8%
• 5-Year Return: 16.7%
• Current NAV: Rs 23.40 as of 17/05/2024
• Assets Under Management (AUM): Rs 2,006.90 (in Cr) as of 30/04/2024

The HDFC Gold Fund is another top-performing gold mutual fund in India. With a robust investment strategy and an experienced fund management team, this fund aims to provide investors with long-term capital appreciation by investing in gold and gold-related instruments.

Performance Comparison of Top Gold Mutual Funds

To better understand the performance of these top gold mutual funds, let’s compare their returns over different time periods:

As evident from the table above, these top gold mutual funds have consistently delivered impressive returns over the short, medium, and long term, making them attractive options for investors.

Factors to Consider Before Investing in Gold Mutual Funds

While the top gold mutual funds offer numerous benefits, investors should consider several factors before investing:

Investment Objective

Ensure that the gold mutual fund aligns with your financial goals and investment objectives. Consider your risk tolerance, investment horizon, and the role gold plays in your overall portfolio.

Fund Performance

Analyze the fund’s performance over different time periods to gauge its consistency and stability. Look for funds with a strong track record of delivering returns across market cycles.

Expense Ratio

Pay attention to the fund’s expense ratio, which is the annual fee charged by the fund for managing your investments. Opt for funds with reasonable expense ratios to maximize your returns.

Fund Manager’s Experience

Evaluate the fund manager’s experience, expertise, and track record in managing gold investments. A skilled and experienced fund manager can make a significant difference in the fund’s performance.

Portfolio Diversification

Understand the fund’s portfolio composition and diversification across different gold-related assets. A well-diversified portfolio can help mitigate risk and optimize returns.

Risk Profile

Assess the fund’s risk profile and ensure it aligns with your risk tolerance. While gold mutual funds are generally considered less volatile than equity funds, they still carry some level of risk.

Investing in top gold mutual funds in India can be an effective way to diversify your portfolio and benefit from the potential of this precious metal. By considering factors such as fund performance, expense ratio, fund manager’s experience, and portfolio diversification, investors can make informed decisions and choose the best gold mutual fund to meet their investment objectives.

Whether you are a conservative investor seeking stability or an aggressive investor looking for growth opportunities, the top gold mutual funds in India offer a range of options to suit your needs. By incorporating these funds into your investment strategy and regularly monitoring their performance, you can potentially enhance your wealth over the long term.

The information provided in this article is for educational and informational purposes only and should not be construed as investment advice. The performance data, metrics, and rankings of the top gold mutual funds mentioned are based on historical data and are subject to change. Past performance does not guarantee future results.

Investors should thoroughly research and evaluate their investment objectives, risk tolerance, and financial situation before making any investment decisions. The article does not take into account the specific needs, goals, or circumstances of individual investors.

Mutual fund investments are subject to market risks, and investors should read the scheme-related documents carefully before investing. The value of investments in gold mutual funds may fluctuate due to various factors, including changes in gold prices, market conditions, and economic developments.

The article’s content is based on information available as of the publication date and may not reflect the most recent developments or changes in the mutual fund industry. Investors should consult with a qualified financial advisor or professional before making any investment decisions.

The author and publisher of this article are not liable for any losses or damages arising from the use of the information provided herein. Investing in mutual funds involves risks, and investors should be prepared to bear potential losses. It is essential to conduct thorough research, compare different funds, and consider seeking professional advice before making any investment decisions.

Arunika Jain, a graduate in Mass Communication, brings a fresh perspective to the world of journalism. Arunika has a passion for writing finance and corporate news at BusinessUpturn.com. You can write to her at [email protected]

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How to Invest in Gold for Beginners

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Since ancient times, gold has been a symbol of wealth and prosperity. Investing in gold has been one of the earliest ways of portfolio diversification. Even today, gold is considered a smart choice to hedge portfolios and for protection from market fluctuations.

Whether you are new to investing or have a well-rounded portfolio, you should consider holding about 5-10% of your total portfolio in gold. Here’s a gold investment guide, especially for beginners. This gold investment guide for beginners will cover why you should invest in gold, different ways in which you can invest in gold, gold tax rates and what you should consider while investing in gold.

Benefits of Investing in Gold:

Different people invest in gold for different reasons. For some, gold is handed down over the generations and preserving that is important. It can come in handy during marriages or be a security for the future. Others take the help of professional financial managers who advise investing in gold. In this guide to investing in gold, we outline the top reasons why you should include gold in your portfolio.      

1. Store of Value

Gold is a long-term store of value. Historically, the value of gold has only appreciated over time. Even when other assets in the market lose their value, gold has proven otherwise. Moreover, gold rates are inversely related to other asset classes, such as equities, ensuring you have a backup even if other investments tank.       

2. Hedge Against Inflation

Investing in gold provides a hedge against inflation. Gold is one of the least volatile asset classes in the market. Its inverse correlation with other volatile asset classes, such as equity, helps maintain its value even in turbulent times.

3. High Liquidity

Since there is a significant demand for gold in the market, it is a highly liquid asset. You can sell it during emergencies and make the money you need. You will not have to wait a long time to liquidate your gold investments.

4. Doesn’t Require Specialized Knowledge

Unlike equity or bond investments , investing in gold doesn’t require deep market understanding. It is simple and easy to invest in gold. Also, the different ways in which you can invest in gold make it accessible for anyone to invest in the asset.

Different Ways to Invest in Gold

Traditionally, it was only possible to invest in physical gold in the form of bullion or jewellery. As financial markets have evolved, new ways of investing in gold have emerged. In this gold investment guide for beginners, we tell you the different ways in which you can make gold investments.

1. Physical Gold

Of course, the easiest way to invest in gold is to buy gold coins, bullion or jewellery. You can visit any gold store and buy these. However, a big disadvantage to this is the money you may lose in making charges. You will also have to find a way to store these investments safely.

2. Digital Gold

An alternative to physical gold investments is digital gold investments. Every investment you make is backed by a 24K physical gold investment. You can start your digital gold investments with as little as Rs 10!

3. Gold Sovereign Bonds

Issued by the Reserve Bank of India, Gold Sovereign Bonds are one of the best ways to invest in digital gold. Apart from the underlying asset appreciation, they also provide annual interest on your investments.

4. Gold Mutual Funds

Gold mutual funds invest in stocks of gold companies, physical gold and other gold investments. Through investments in these assets, you can diversify your gold investment.

5. Gold ETFs

Gold Exchange Traded Funds make gold investments and allow you to trade in fractions of them like equities.

Gold: A Historical Overview

In ancient Greece, gold was used as currency. Since then, the precious metal has found its place in the financial markets. The rise of the gold standard as a monetary system used fixed quantities of gold to determine the value of money. After World War II, the gold standard collapsed, and the Bretton Woods Agreement replaced it.

Today, while gold does not back currency reserves, it is still considered one of the best investments. It is inversely related to stock market performance, providing a hedge against inflation.

Tax Rates for Gold Investments 

Physical gold held for less than three years attract a short-term capital gains tax (STGC) at your income slab level. For investments held more than three years, long-term capital gains (LTGC) tax at 20% plus a 4% cess is levied.

Digital gold held for less than three years does not attract any direct tax. LTGC on digital gold is applicable at a rate of 20% plus cess and surcharge.

Key Risks of Investing in Gold

Depending on the investment option, investing gold as an asset class also entails certain risks:

• Physical Gold: Investing in physical gold carries the risk of theft and purity issues.
• Digital Gold: Currently, digital gold in India is issued by institutions like Augmont Gold and MMTC-PAMP. This method of gold investment lacks regulatory oversight as it is not under any regulatory body such as RBI or SEBI.
• Gold ETFs and Mutual Funds: Potential volatility in gold prices poses a risk to these two gold investment options, since the underlying asset for both is physical gold. For example, Gold ETFs invest in physical gold or companies engaged in mining or refining gold operations. Therefore, a change in the price of gold has a direct impact on gold ETF performance. Regardless, it is to be noted that, unlike digital gold, gold ETFs and mutual funds are under the regulatory purview of SEBI.
• Sovereign Gold Bonds: Instead of physical gold, these bonds are backed by a derivative of gold issues by the government through the RBI. Therefore, there is a risk of sovereign default. Sovereign default refers to a situation arises wherein the government cannot repay its outstanding debt.

ICICI Securities Ltd. (I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Venture House, Appasaheb Marathe Marg, Prabhadevi, Mumbai - 400 025, India, Tel No : 022 - 6807 7100. The contents herein above shall not be considered as an invitation or persuasion to trade or invest. I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon. The contents herein above are solely for informational purpose and may not be used or considered as an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments or any other product. Investments in securities market are subject to market risks, read all the related documents carefully before investing. Investors should consult their financial advisers whether the product is suitable for them before taking any decision. The contents herein mentioned are solely for informational and educational purpose.

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4 popular ways of buying gold as an investment option.

Summary: Gold as an investment enhances the diversity of your portfolio and promotes long-term wealth preservation. Click to learn the best way to invest in gold today!

Gold never gets old in a country like India, where it has been a part of almost every household, not only as jewellery but also as an investment.

While there are various gold saving schemes available in India besides purchasing gold coins, bullion, and jewellery, the best option to invest in gold would depend on preferences and factors such as the amount of investment and the need for liquidity. Digital gold is a virtual investment, whereas gold ETFs and gold mutual funds are more suitable for people familiar with stock and mutual fund investments. On the other hand, sovereign gold bonds offer a government-backed investment option in gold.

The options are aplenty; however, let us look at each form of investment in detail.

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Digital gold  .

Digital gold in India is offered by MMTC-PAMP, Augmont, and SafeGold. You can also buy it from platforms such as mobile e-wallets, broking firms, and financial institutions. Digital gold is certified pure, stored safely, and fully insured, and the market price of physical gold governs the return on this investment.

You can buy digital gold of denominations as low as one rupee, sell it back at any time, and even opt for physical delivery.

Gold ETFs  

Gold ETFs are mutual funds that track the domestic price of physical gold. The fund management company uses your investment to buy gold bullion. As gold ETFs are listed and traded in stock exchanges, investing in gold ETFs is safe and tightly governed. You can buy and sell  units of gold ETF on the stock exchange on the same day or any other day just like stocksThe minimum investment is one unit of gold ETF, which represents the price of one gram of physical gold. Since these are listed, gold ETFs have high liquidity and can be easily traded in the stock market.

Gold Mutual Funds  

Gold Mutual Funds invests in the units provided by Gold ETFs. As the underlying asset is held in the form of physical gold, its value is directly dependent on the price of Gold. This functions just like any other Mutual Funds.

Sovereign Gold Bonds  

Sovereign gold bonds are RBI-issued government bonds representing grams of physical gold. These are sold through banks, post offices, Stock Holding Corporation of India, and authorised stock exchanges and are offered in a limited number of tranches annually. You can also apply for them online through  IDFC FIRST Bank’s SGB investment page . The minimum investment quantity is one gram, and the maximum allowed for an individual is 4 kg. They offer an assured 2.5% interest per annum, in addition to the price appreciation in gold. SGB  scheme has a tenure of 8 years but can be redeemed or encashed from the fifth year onwards. SGBs held in Demat form can be traded on stock exchanges between eligible investors.

Gold can undoubtedly be an essential part of one's investment portfolio. Choose from these four investment options wisely and benefit from the wealth-preserving properties of gold investment.

This definition is more appropriate for Gold Funds and not Gold Mutual Funds. Currently all Gold Mutual Funds invest in Gold ETFs. 

The contents of this article/infographic/picture/video are meant solely for information purposes. The contents are generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. The information is subject to updation, completion, revision, verification and amendment and the same may change materially. The information is not intended for distribution or use by any person in any jurisdiction where such distribution or use would be contrary to law or regulation or would subject IDFC FIRST Bank or its affiliates to any licensing or registration requirements. IDFC FIRST Bank shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information mentioned. Please consult your financial advisor before making any financial decision.

Disclaimer:

The features, benefits and offers mentioned in the article are applicable as on the day of publication of this blog and is subject to change without notice. The contents herein are also subject to other product specific terms and conditions and any third party terms and conditions, as applicable. Please refer our website www.idfcfirstbank.com for latest updates.

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Gold saving schemes in india.

Pratiksha Mahawar

Created on 27 Mar 2024

Wraps up in 3 Min

Read by 6.5k people

When you look at the returns gold has given over the years, you can see how it has proven itself as a star investment:

• 11% p.a = Over the last 25 years,
• 15% p.a = Over the last 5 years, and
• 16% p.a = Over the last year.

Astounding, right? The asset has already reached its record high of ₹67,000 this year and is expected to further soar to ₹70,000 in the next few months.

Now that we’ve established gold as a great asset, it is no surprise that gold investment is a wonderful option for investors. In that direction, we will cover different gold-saving schemes in India.

Gold saving schemes have been an integral part of gold investments in India for several years. With the advent of modern technology, gold saving schemes have evolved to grant investors extra benefits - be it returns, flexibility or discounts.

Popular Gold-Saving Schemes in India

Generally, gold saving schemes are divided into three main categories, one of which is a new addition to the sector:

a. Jeweller Gold Saving Schemes: Invest a fixed amount monthly to a jeweller and redeem the accumulated sum in gold ornaments at maturity.

b. Digital Gold Saving Schemes: Investing a fixed amount via digital websites or apps and getting hefty returns.

c. Bank Gold Saving Schemes: These can be further divided into two categories, which are discussed in the article.

Without further ado, let’s see which of the schemes make the list:

1. Jos Alukkas’ Easy Buy Gold Saving Schemes

This gold-saving scheme is part of the traditional jeweller's gold-saving schemes. Here’s how this gold investment plan goes:

• Investors pay monthly instalments for a certain period, say 12 months.
• At the end of 12 months, they purchase a gold item with the total accumulated amount.

This scheme is a popular choice among jewellery lovers, and its instalments range from ₹1000 to ₹1 lakh . At the end of 12 months, investors also get discounts on gold that they buy as a price for being invested in the scheme.

2. Gullak Gold+ Gold Saving Schemes

Gullak Gold+ is an innovative gold-saving scheme where investors can buy and lease their gold on Gullak’s app. The gold is leased to India’s largest jewellers (with more than ₹25,000 Cr. annual turnover and 15+ years of experience in the market), and these jewellers give an extra 5% gold every year to the investors.

For example, if you invest 100 gms in Gullak Gold+ , you'll have 105 gms by the end of 1st year, 110.25 gms by the end of 2nd year and 148 grams in 8 years. Sounds amazing, right?

On top of this, investors also get the benefit from gold price appreciation. A 100% bank guarantee is also provided to safeguard investments during the lease tenure. The investments are withdrawable at any time , and investors can either make SIPs or one-time investments.

Investors can withdraw investments in cash , order gold coins from Gullak or buy jewellery of equal value to their investments from Gullak’s partner stores like Caratlane.

Interestingly, Gold+ beats returns from all gold schemes in India .

3. Bank-Provided Gold Saving Schemes (Gold Monetisation Scheme)

Bank-provided gold investment plans or Gold Monetisation Scheme (GMS) is a gold scheme that provides extra returns on your idle gold (gold that you already have at home).

There are 3 deposit schemes: short-term, medium-term and long-term. The returns and lock-in periods vary depending on the same. Returns range from 0.8% to 2.5% across 3-15 years long lock-in periods. (The returns are also dependent on the lock-in period.)

The extra returns are provided in INR on top of the principal amount (value of gold during the start of the tenure), and there are penalty charges for early withdrawal. Deposits for this scheme start at a minimum of 10 gm.

A Final Thought on Gold Saving Schemes

With multiple gold investment plans arriving every year, we need to be aware of opportunities that’d help in doubling down on gold investments. Gullak Gold+, easy gold schemes and gold monetisation schemes are examples of such gold-saving schemes.

However, it is crucial to do personal research before making investment decisions to maximise profits and minimise risks.

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A Comprehensive Guide to Best Gold Investment Plan

Gold, the timeless treasure, has captivated investors for centuries with its allure of stability and potential for growth. But with a plethora of investment options available, navigating the world of gold can be daunting. 

Whether you are a seasoned investor or a curious newcomer, this guide delves into the diverse landscape of gold investment plans. We’ll explore the pros and cons of each option, considering factors like:

• Risk tolerance: Are you seeking a safe haven or a chance for higher returns?
• Investment horizon: Do you envision a short-term strategy or a long-term commitment?
• Financial goals: Are you aiming for capital appreciation, regular income, or portfolio diversification?

By understanding your unique needs and goals, we will equip you with the knowledge to choose the gold investment plan that shines brightest for you.

Why should you invest in gold?

While diversification is the bedrock of any sound investment strategy, including gold can be particularly insightful. Here is a deeper dive into its potential benefits and why it might deserve a place in your portfolio:

1. Inflation Antidote

Unlike fiat currencies prone to inflation’s erosion, gold historically holds its value. Its finite supply, immune to government manipulation, acts as a natural inflation hedge. Imagine a scenario where inflation soars – while other assets might depreciate, gold’s purchasing power remains relatively stable, protecting your wealth.

2. Volatility Dampener

While equity markets often resemble roller coasters, gold tends to exhibit lower long-term volatility. This “calm amidst the storm” effect can provide stability to your portfolio, particularly during periods of market turbulence. Remember, diversification is about reducing risk, and gold can be a valuable tool in achieving that.

3. Inverse Correlation Magic

Beauty lies in the contrast. Gold often exhibits an inverse correlation with equities. When stocks plunge, gold tends to rise, offering a potential buffer against market downturns. This “antifragility” can be crucial in mitigating portfolio losses during economic crises, as evidenced by gold’s performance during the 2008 financial crisis or the 2020 pandemic.

4. Global Safe Haven

Geopolitical tensions, economic uncertainties, and currency fluctuations can create anxiety for investors. Gold, with its global recognition and historical stability, often serves as a safe haven during such times. Its value transcends national borders, offering a sense of security when traditional investments might seem shaky.

5. Tangible Treasure

Unlike stocks or bonds, gold possesses a physical presence. You can hold it, touch it, and even store it securely. This tangibility can be appealing to some investors who prefer a more concrete asset class, especially during periods of digital uncertainty.

Physical gold boasts timeless allure, but its limitations are undeniable. Thankfully, the digital realm offers a plethora of alternatives, each with unique advantages and considerations.

Gold Investment Plans in India

Digital gold.

Fractional ownership of gold is facilitated through online platforms, offering immediate accessibility and liquidity. However, safekeeping and counterparty risk remain critical considerations.

• Convenience: Invest any time, anywhere, with just a few clicks. No need for physical storage or security concerns.
• Fractional ownership: Buy gold in smaller amounts, making it accessible to a wider audience.
• Transparency: Live tracking of prices and holdings ensures clear visibility.
• Liquidity: Easily buy and sell your holdings through online platforms.
• Limited downside: Prices primarily track physical gold, offering some stability.
• Emerging market: Relatively new option, so its long-term track record is limited.
• Counterparty risk: Relies on the platform’s credibility for safe storage and redemption.

Exchange-traded funds provide diversified exposure to physical gold without direct ownership. They offer high liquidity and lower costs but track physical gold with slight deviations and lack physical possession.

• Exchange-traded: Buy and sell units on stock exchanges like regular stocks, offering high liquidity.
• Diversification: Invest in a basket of gold bars, spreading risk and reducing storage costs.
• Professional management: Experienced fund managers handle the underlying gold holdings.
• Low expense ratios: Generally lower fees compared to actively managed gold funds.
• No physical ownership: You don’t directly own the gold, only the units representing it.
• Market fluctuations: ETF prices can deviate slightly from physical gold prices due to tracking errors.

Gold Mutual Funds

Actively managed funds investing in gold and related assets, aiming for superior returns. While offering professional expertise and diversification, they incur higher expense ratios and expose investors to performance risk.

• Active management: Fund managers actively buy and sell gold and gold-related securities, aiming for higher returns.
• Diversification: You can invest in a broader range of gold-related assets beyond just physical gold.
• Professional expertise: Leverage the knowledge and experience of fund managers.
• Higher expense ratios: Actively managed funds typically charge higher fees than ETFs.
• Performance risk: Returns depend on the fund manager’s skill and market conditions.

Sovereign Gold Bonds

Government-backed securities linked to gold prices offer guaranteed interest, tax benefits, and limited liquidity. Investors relinquish direct ownership in exchange for security and fixed returns.

• Government guarantee: Offers the safety and security of a government-backed instrument.
• Tax benefits: Interest earned is tax-free, and capital gains are exempt after 8 years.
• Regular income: Pays periodic interest, unlike physical gold or ETFs.
• Limited liquidity: Lock-in period of 5 years, with exit options after 3 and 5 years.
• Lower returns: Interest rates are generally lower than traditional fixed-income options.
• Limited availability: Bonds are issued periodically, requiring you to wait for new offerings.

A comprehensive analysis of risk tolerance, investment horizon, and desired level of control is crucial. Diversification across various gold investment avenues can mitigate risk and optimize portfolio returns.

Key Risks of Investing in Gold

Investing in gold is not without its drawbacks. The key risks associated with investing in gold are:

• No Income: Unlike dividend-paying stocks or interest-bearing bonds, gold does not generate regular income. Your returns are solely based on price appreciation.
• Storage Costs: Holding physical gold incurs storage and insurance costs, which can eat into your returns. Consider digital alternatives if physical ownership isn’t a priority.
• Tax Implications: Depending on your investment method, tax implications for gold can vary.

Minimum Investment Requirements

This section serves as your golden compass, guiding you through the minimums associated with different gold investment avenues in India.

Comparison of Returns and Costs of Gold Investment Options

While the underlying asset – gold itself – remains the same, the true value of your investment hinges on the cost of acquiring and holding it. Here’s a breakdown of popular options and their associated expenses:

While Sovereign Gold Bonds seem to shine brightest in terms of cost-efficiency, remember, they have limited liquidity and potentially lower returns compared to other options. Ultimately, the “best” choice depends on your individual needs and priorities.

Carefully consider the cost-benefit analysis, liquidity needs, and potential returns before making a decision. Also, diversification is key. Integrating gold into your portfolio alongside other asset classes can help mitigate risk and optimize your overall financial health. 

Investing in gold can be a powerful tool for securing your future. With the knowledge gleaned from this guide, you are now equipped to make informed decisions and chart your course towards a brighter, more golden financial future. 

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LenDenClub is India’s largest alternate investment platform which started operations in India in 2015. We have been helping investors diversify their investments beyond traditional investment instruments ever since.

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Gold Investment In India

Gold has remained one of India’s most preferred modes of investment for a long time. This is part because gold investments retain their value and even grow during periods of economic uncertainty. Additionally, gold investments in India can provide you protection against inflation and can be a good portfolio diversifier. With a plethora of options available today, gold investment in India is not just limited to buying gold in its physical form. In this article, let us understand key details about gold investment in India, including taxation and things to consider before investing.

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Why Invest in Gold?

Gold investment in India can be the ideal investment option for risk-averse investors. The most significant advantage of investing in gold is that it has little correlation with other types of assets. Hence, it can act as a buffer to your volatile portfolio. Here are some reasons why gold investment in India can be beneficial: -

Helps Beat Inflation

Portfolio diversification, supply and demand, helps balance currency devaluation, crisis commodity, easy to own, options available to invest in gold.

The traditional way to invest in gold is to buy physical gold in the form of coins, jewellery, or ornaments. However, there are some new forms of gold investment in India, which are equivalent to buying physical gold but without the hassles of going to a store. Let us talk about the most popular ways to invest in gold today:

1. Investment in Physical gold

2. gold etfs (exchange traded funds), 3. gold mutual funds, 4. gold schemes, 5. digital gold, 6. sovereign gold bonds.

Sovereign Gold Bonds is a gold investment option introduced by the Reserve Bank of India. As the name gives away, gold bonds are securities that are traded in the form of gold. Investors have the options to buy the bonds in digital, physical or dematerialized format. The following table displays the key differences between these three types of gold investment in India: -

What are Gold Funds?

Gold funds are the newest form of gold investment in India, where you do not have to hold this precious asset in the physical form. They are open-ended funds that invest in units of Gold Exchange Traded Funds (ETF). The primary goal of gold funds is to create wealth by making use of the potential of gold as an asset. It is very convenient to invest in gold via gold funds instead of buying physical gold. With gold funds, you can enjoy the benefits of professional fund management. Each gold fund is assigned a fund manager who takes the investment decisions as per the objective of the fund. The returns generated from a gold fund is similar to that of a gold ETF. Also, the Net Asset Value (NAV) [1] of the gold fund can be influenced by the price movements of gold in the market.

Gold Investment vs Mutual Funds

Gold investment in India holds sentimental value and has been used as a currency for years before paper money came into existence. Gold is a conventional source of investment that has the power to beat inflation because of its value. On the other hand, mutual funds [3] are a modern-day investment tool that pools the funds from small investors and puts them in stocks, bonds, and other assets. Mutual funds have grown in recent times due to their wide-ranging benefits such as portfolio diversification, varied options, compounding, etc. Both investment options can be rewarding, but which one is more beneficial. Let us look at a comparative study of gold vs mutual funds to find out.

Taxation of Gold Investment Options

As an investor, it is essential to know that the taxation on returns depends on the mode of gold investment in India. People who purchase physical gold will be taxed differently compared to those investing in gold bonds. Let us look at the taxation of different modes of gold investment: -

Digital Gold

Physical gold, gold etfs and mutual funds, minimum investment requirement.

From what we have discovered so far, there are numerous gold investment options at our disposal. However, it is to note that there’s a minimum investment requirement for certain gold investment options. Here’s a table to brief you about it.

Things to Consider Before Investing in Gold

Financial markets usually swing to extremes during an economic crisis such as a pandemic. Gold is one asset that gains traction during these situations. If you are looking to invest in gold, here are some of the things you need to consider before investing: -

Performance

Frequently asked questions(faqs).

How much should I invest in gold in India?

There is no limit to gold investment in India. However, as a rule of thumb, you should not make gold investments more than 10% of your overall account value.

Is gold investment in India profitable?

Gold, being a precious metal, can generate significant returns in the long run. Moreover, gold is highly liquid and can be easily converted into cash.

What affects the gold prices in India?

The factors that affect the gold prices in India include inflation, government gold reserves, jewellery market, interest rate trends and the global movement in gold prices.

Should I make the gold investment in India?

Yes, the gold investment in India can prove to be an asset that hedges against inflation and stock markets.

Is Gold ETFs better than Gold funds?

If you are looking to make regular investments as opposed to a one-shot investment, gold funds can be a better and more rewarding option. However, for investors looking for a cost-effective option, Gold ETFs can be the right choice.

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Best Gold Investment Options in India | A comparison

We  (Indians)  love the yellow metal  (gold) . India’s love affair with gold has been since ages. From times immemorial, gold has been seen as a safe investment, especially when there is an economic crisis. Gold has been preferred by governments also, as a collateral against any crisis.

In fiscal year 2022, India was estimated to import more than 3.4 trillion Indian rupees worth of gold. This represented an increase of roughly 35 percent compared to the previous year, when Indian gold imports stood at over 2.5 trillion rupees.

Though the financial inclusion and banking services have become widespread even in small towns and rural areas, Gold still remains one of the best investment options with the rural population. Rural India’s gold demand is around 55% to 60% over the last few years.

The middle class is the primary gold consumer in India and prefer to buy Gold in jewelry form. The buying pattern of Gold is slowly changing with the Urban population and younger generation, thanks to the availability of various alternative ways of buying gold (Gold ETFs, Digital Gold, Sovereign Gold Bond Schemes etc.,)

Even though the scale and value of UPI transactions are skyrocketing in the country, a new report by the World Gold Council notes that “cash remains the preferred means of making a purchase, accounting for some 50 to 60 per cent in metros and large cities, and 70 to 80 per cent across the rest of India, in terms of value.” It, however, doesn’t fail to acknowledge an increase in digital transactions . 

In this post let’s understand – What are the best gold investment options available in India? Comparison of alternate ways of buying gold in India..

Comparison of Gold Investment Options in India

Below are the different ways through which one can buy Gold in India;

• Gold Jewelry
• Gold Exchange Traded Funds (ETFs)
• Gold Mutual Funds
• Sovereing Gold Bond Schemes
• Digital Gold

Digital gold is a new age version of buying gold through online channels. It is a virtual method of buying and investing in the yellow metal without having to physically hold the gold, for a specified period. The minimum value of the gold you can purchase through some of the mobile wallet apps (like Google pay or Paytm) is as low as Re 1 to Rs 10. Please note that Digital gold falls in an undefined grey zone when it comes to regulation.

Physical Gold

Purchasing physical gold in the form of gold bars, coins, or jewellery is a traditional way of investing. It requires secure storage and incurs additional costs, such as making charges and purity testing.

• Key Risk : Difficult to store and safeguard, as it can be easily stolen.
• Easy of Buying : Can buy very easily by visiting a gold jewelry store located near to you. You can also buy gold coin or bars from a banking institution.
• Minimum Investment : You can buy 1 gm of gold.
• Expenses : Making charges, wastage and storage charges
• Liquidity : Can be bought and sold quite easily.
• Capital Gains Holding Period  :  If the gold is being sold within three years from the date of your purchase then it is considered as  short-term , while gold sold after three years is considered as  long term .
• Capital Gains & Gold Tax Rates  : Short-term capital gains on sale of gold is added to your gross total income and taxed at the income tax rates applicable to your income slab. Whereas, the long-terms gains are taxed 20.8%  (including cess)  with  indexation benefits .
• TDS Rate  : TDS rate is not applicable on selling of Gold. However, buying jewellery over Rs 2 lakh  in cash will attract 1% TDS .
• GST Rate  : On gold jewelry purchase, you are charged Goods and Service Tax (GST) at 3% on the value of gold plus making charges, if any.

Below are the best alternative ways of investing in Gold in India and their comparison on various factors;

“ Effective from the Financial Year 2023-24, the gold funds fall under the category of Specified Mutual Funds for income tax purposes. The capital gains are treated as Short-term irrespective of the holding period of fund units and are taxable at the applicable income tax slab rates. ” On the units bought before 01-Apr-2023, if units are held for more than 3 years then such long term capital gains are taxable at 20% (with indexation) and short-term capital gains (holding period of less than 3 years), taxable at income tax slab rates.

There is one more way of investing rather trading in Gold i.e., Gold futures and options . These are derivatives contracts that enable traders to speculate on the future price movements of gold without owning the physical metal. Here’s a brief explanation of each:

• Gold Futures: Gold futures contracts represent an agreement to sell or buy a particular amount of gold at a set price and future date. Futures trading allows for leveraged trading, meaning traders can control a larger amount of gold with a smaller initial investment.
• Gold Options: Gold options give traders the right, but not the obligation, to sell or buy gold at a specified price within a predetermined timeframe. Options provide flexibility and allow traders to profit from rising and falling gold prices.

Both gold futures and options are traded on regulated exchanges and involve a certain level of risk. Understanding these derivatives thoroughly and assessing your risk appetite before participating in such trading activities is crucial.

Conclusion :

Whether physical Gold adds value to your investment portfolio or not, majority of us still prefer accumulating gold in physical form only. Most of the gold held by us, are in the form of jewelry. Jewelry, being easy to adorn and display, creates a sense of well-being and provides a sense of security, that a physical asset can provide. 

For short term, you can consider Gold ETFs and Gold mutual funds. For long-term, can have a look at Gold Bonds.

If you decide to make gold as part of your investment portfolio and looking for an alternate way to invest, you can consider above mentioned pros and cons of different ways of buying gold, and then can take an informed investment decision.

Continue reading:

• Gold Investments Tax Treatment in India | Taxation rules on Gains from Selling Gold
• How to set-off Capital Losses on Mutual Funds, Stocks, Property, Gold, Bonds & Debentures?
• Income Tax Deductions List FY 2023-24 | Under Old & New Tax Regimes
• How to save Capital Gains Tax on Sale of Gold?

(Post published on : 08-Aug-2023) (Post last updated on : 03-Oct-2023)

About The Author

Sreekanth Reddy

ReLakhs.com is a blog on personal finances. The main aim of this blog is to help you make INFORMED financial decisions by presenting the content on money matters in a simple, unbiased and easy to understand manner.

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Unlocking the Potential of Gold Investment: Plus Gold Shines Bright on Shark Tank India

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How to Start Gold Import-Export Business in India: A Step-by-Step Profitable Guide for Beginners

Table of contents, research and market analysis, business plan, legal requirements, sourcing gold, logistics and transportation, marketing and sales, financial management.

The lure of gold has been timeless. With India being one of the largest consumers of this precious metal, the question that often arises is, “How can I start gold import-export business in India?” and “Is gold import business profitable in India?” For beginners looking to step into the vast domain of import-export, diving into the gold business might seem daunting.

However, understanding the profit margin in the gold business in India and the necessary steps can make this journey smoother. Before delving into the business itself, one must also wonder, “How do I start an import-export business for beginners?” and “How can I get a gold import-export license in India?”

This guide will take you through each of these steps, starting with obtaining a DGFT license for importing gold, and then moving on to investing in a gold business. While an individual importing gold in India might be a common query, it is essential to know that businesses have a specific protocol to follow.

How to Start Gold Import-Export Business in India

Before you jump into the gold business, understanding the market is paramount. Studying current trends, global gold prices, and the demand-supply chain can help gauge profitability. It’s crucial to analyze both the domestic and international market conditions. Understand the preferences of Indian consumers, identify potential international markets for export, and be updated about the global economic factors affecting gold prices.

After thorough research, the next step is drafting a comprehensive business plan. This plan should detail your business objectives, target markets, competition analysis, funding requirements, and expected profit margins. Given the fluctuating nature of gold prices, risk management strategies should also be a part of your plan. This document will be a roadmap for your gold business in India and crucial if you seek financial backing or gold business investment.

Company Registration : To begin business in India, you must first register your company. Multiple options include sole proprietorship, partnership, or private limited company. Depending on your scale and objectives, choose the best fit.

Import-Export License : Obtaining an import-export license is mandatory to start importing or exporting gold. This is where the dgft license for gold import comes into play. The Directorate General of Foreign Trade (DGFT) oversees this process, ensuring that businesses meet specific criteria before being granted the license.

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Taxation and Compliance : The gold business is heavily regulated, with several tax implications. Regular filing of Goods and Services Tax (GST) returns, staying updated with tax rates, and ensuring compliance with all tax laws is crucial.

Customs Procedures : Understanding customs procedures is essential when dealing with imports and exports. You’ll frequently deal with customs duties, clearances, and documentation for gold import licenses in India.

International Suppliers : Building relationships with credible international suppliers is vital for importing gold. These suppliers can be from gold-rich countries like South Africa, Australia, or Russia. Ensuring the quality and authenticity of gold is essential to maintain trust in the Indian market.

Domestic Sources : If your business also involves buying gold domestically, you should know local gold markets and suppliers. Regions like Kerala and Rajasthan have significant gold markets in India.

Refining Services : Once you’ve sourced the gold, it might require refining to meet the desired purity standards. Collaborating with trusted refining services ensures that the gold you deal with is of the highest quality.

Packaging and Insurance : Gold, a high-value item, must be packaged securely. Additionally, insuring gold shipments against potential losses during transit is necessary.

Freight Forwarding : Choosing a reliable freight forwarder ensures that your gold shipments reach their destination on time and in good condition. A forwarder with experience in handling precious metals will be beneficial.

Secure Storage Facilities : Once the gold arrives in India or before it’s exported, it needs safe storage. Investing in secure storage facilities or collaborating with established ones is crucial to protect your investment and maintain credibility.

Online Presence : In the modern digital era, it’s vital for any business, especially one dealing in gold, to have a strong online presence. This means creating a user-friendly website, being active on social media, and using SEO to boost visibility. You can also sell gold directly through e-commerce, making it convenient for customers. Online ads and campaigns can bring in more customers and make your gold business more profitable.

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Networking : Networking is the backbone of the import-export business. Attending trade fairs, joining business chambers, and participating in gold-related seminars can open up numerous opportunities. One can meet potential suppliers, clients, and competitors through these events. Gaining insights from these interactions can help refine business strategies and identify areas of improvement or collaboration.

Relationship Building : The gold business thrives on trust. Building and maintaining strong relationships with suppliers, clients, and other stakeholders is essential. Regular follow-ups, transparent communication, and honoring commitments cement relationships in this industry. Over time, these relationships can lead to repeat business and referrals and significantly reduce transactional risks.

Budgeting : Effective financial management begins with budgeting. Forecasting expenses and expected revenues and allocating funds ensure the business runs smoothly. Regularly revisiting and adjusting the budget based on real-time data helps avoid overspending and aids in optimal resource utilization.

Pricing Strategy : In the volatile world of gold prices, formulating a sound pricing strategy is crucial. This involves considering global gold rates, customs duties, taxes, and other overheads. It’s essential to balance competitive pricing and maintaining healthy profit margins. Monitoring and adjusting prices based on market conditions can lead to better sales and profitability.

Cash Flow Management : Ensuring a positive cash flow is paramount for any business. This means that the money coming into the business should always be more than the money going out. Regularly tracking receivables, managing payables, and ensuring that funds are available for daily operations can keep the business solvent and reduce financial stress.

Risk Management : The gold business comes with risks, from fluctuating gold prices to potential shipment losses. Investing in comprehensive insurance policies, hedging against price fluctuations using financial instruments, and always having contingency plans can mitigate these risks. Regularly assessing potential threats and devising strategies to counter them can safeguard the business’s financial health.

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Embarking on a gold import-export venture in India is a journey filled with promise and challenges. Entrepreneurs can navigate the industry’s complexities with a foundation built on strong marketing practices and astute financial management. Businesses can sustain and thrive in this golden endeavor by leveraging the power of digital platforms, fostering genuine relationships, and keeping a vigilant eye on financial health. As with any venture, continuous learning, adaptation, and perseverance are the keys to unlocking lasting success in the gold business landscape.

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Sebi, RBI plan to bring digital gold under regulatory ambit

As part of the plan, the government may amend the Sebi Act and Securities Contracts Regulation Act to categorise digital gold as a security, said two officials with direct knowledge of the matter, requesting anonymity.

The finance ministry, the Securities and Exchange Board of India (Sebi) and the Reserve Bank of India (RBI) are working to bring digital gold, along with crypto assets, under some regulatory oversight, as concerns mount over the unchecked growth in such investments without investor protections that apply to regulated securities.

The government plans to address the issues of transparency, outrageous claims, and lofty promises made by some companies in unregulated assets to lure investors.

Prime Minister Narendra Modi on Saturday chaired a meeting with regulators on deciding a long-term strategy for crypto assets. This followed the standing committee on finance holding a meeting on Monday with stakeholders to ascertain their views on ‘opportunities and challenges associated with crypto finance’.

Mint has reviewed a copy of the notice issued by the standing committee for a dialogue with associations and industry experts on crypto. E-mailed queries to Sebi and the finance ministry on supervision of digital gold were not answered immediately.

The proposal to regulate the assets comes after Sebi in September and October barred registered brokers and investment advisers from offering digital gold and other unregulated investment products. The regulator said offering such products was a violation of the Sebi Act and, as a consequence, could lead to monetary penalties and, in some cases, licence cancellations. Some fintech firms selling digital gold had to stop such sales even as others hived off the digital gold offering to their unregulated parent entities.

Some firms offered digital gold as an investment product to attract customers who were averse to investing in equity-related products.

The ban opened up an arbitrage opportunity, with RBI regulated entities and unregulated firms being able to offer digital gold without any penalties. “There is clearly a regulatory arbitrage. We never sold digital gold because we thought it’s not a good product and not because of anything else,” said Nithin Kamath, chief executive and founder of Zerodha, a financial services platform.

Sebi is in talks with the government to categorize digital gold as securities in the upcoming budget. “The only way around this is if digital gold is termed as securities by an amendment to the Securities Contracts (Regulation) Act (SCRA) and Sebi Act. Then digital gold would become regulated, and all registered investment advisers, brokers and their connected entities would be able to offer digital gold,” said the first of the two officials cited above.

“Essentially, all gold trading on exchanges is anyway under us, so digital gold is not much of a stretch. Sebi has no concerns in regulating digital gold but requires an amendment to the Sebi Act and linking it to the gold exchanges. Currently, digital gold is being offered in a regulatory vacuum. Our circular is essentially aimed at ring-fencing regulated entities,” the second official said.

The government is in the process of setting up regulated gold exchanges under Sebi’s regulatory purview. The regulator has already approved the framework for operationalizing gold exchanges, which would enable the facilitation of trading in gold through electronic gold receipts. While the issues around digital gold may resolve by the next fiscal, the differences between RBI and Sebi over who should regulate crypto assets continue.

“Sebi does not believe it has systems in place to ensure settlement of crypto as there is no underlying asset to settle, and RBI does not want to get into a product which is traded/settled. Even more so, RBI is saddled with a Supreme Court ruling of 2020 on regulating crypto. Only the finance ministry can come up with a solution,” said the first official. The finance ministry is working on a bill to regulate crypto and its taxation.

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Akshaya Tritiya 2024: How to Invest in Digital Gold? Gold Mutual Funds, ETFs & Sovereign Gold Bonds

15 May,2024 11:56 AM IST

Buying Gold on Akshaya Tritiya is a tradition that holds immense religious and cultural significance in India. After all, this tradition is known to invite prosperity and good fortune as per the Hindu tradition. But is buying Gold, restricted only to physical Gold like jewellery, Gold bars and gold coins? Surely not. With several advantages, buying Digital Gold stands as a lucrative option for investors and if you are planning to invest in one, this video is just for you. What are the various modes of Digital Gold investments, what is the point of discussion on Physical gold vs Digital Gold and, how to invest in Digital Gold? How do the different Digital Gold instruments of Gold-Based Mutual Funds, Gold-Based ETFs and Sovereign Gold Bonds (SGB) compare with each other in terms of returns, risks and liquidity? This Akshaya Tritiya 2024, enhance your Akshaya Tritiya gold buying and know everything about Digital Gold investments in this episode of ‘Money Matters’ as host Katyayani Kapoor explores the different ways of Investing in Digital Gold with SEBI registered Certified Financial Planner Kalpesh Ashar.

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After long wait, India inks Chabahar port's 10-year deal with Iran

India's plans with the port go beyond commercial interests, according to the centre.

The signing of the Long Term Bilateral Contract on Chabahar Port Operations in presence of HE Mehrdad Bazrpash, Minister of Roads & Urban Development, Iran & India's Minister of Ports, Shipping and Waterways Sarbananda Sonowal | Photo: X/ @sarbanands

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Chabahar explained: how india can bypass pak, reach europe via iran port, india to sign 10-year agreement with iran to manage chabahar port, india, iran to ink 10-year agreement to manage and operate chabahar port, traffic handled by major indian ports hits 5-year high in january, adani ports q4 results: net profit jumps 76% to rs 2,040 cr, revenue up 19%, domestically held gold reserve rise by 40% in 5 years, shows rbi data, india exim bank looks for $3.5 bn foreign currency borrowings in fy25, retail inflation eases to 4.83% in april, surge in food prices continues, 514 million person-years employment created during 2014-24: report, india's imports from fta partners up 38% during 2019-24 fiscal years: gtri.

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First Published: May 13 2024 | 9:20 PM IST

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India to tighten scrutiny on EV investments: Report

Existing companies in india do not need to register a new subsidiary to apply under the new policy. they can apply for an import license for a certain number of evs and must commit to investments to qualify..

The forthcoming guidelines will provide details on portal links and the project monitoring agency.

India is set to issue additional investment guidelines under the electric vehicle (EV) policy announced in March, a government official told The Economic Times . Applications from auto companies based in countries sharing a land border with India, such as China, will undergo "much more onerous scrutiny." However, companies already established in India will not need to create new subsidiaries to apply under the policy, the official stated.

This development follows the cancellation of Tesla CEO Elon Musk's highly anticipated visit to India in April. Tesla has not yet communicated its plans to the Indian government under the new EV policy. Musk, who was scheduled to visit India on April 21-22, postponed his trip at the last moment due to "very heavy Tesla obligations." He surprisedly visited China a week later, where he met with high-ranking officials.

Also Read |   Tesla 'silent'; yet to communicate its India plans: Official

“They (Tesla) are just silent… the (EV) policy was always meant for everybody,” the official told ET. “The commercial decisions are announced by the companies.”

The forthcoming guidelines will provide details on portal links and the project monitoring agency. Existing companies in India do not need to register a new subsidiary to apply under the new policy. They can apply for an import license for a certain number of EVs and must commit to investments to qualify.

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Must Read |  Why India is a perfect fit for Elon Musk’s Tesla

The Ministry of Heavy Industries conducted the first round of consultations on the EV policy last month. Approved on March 15, the policy offers duty concessions to companies setting up manufacturing units in India with a minimum investment of $500 million. These companies will have three years to establish manufacturing facilities and begin commercial production of EVs, with a requirement to achieve 50% domestic value addition (DVA) within five years.

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