Profitable way of investing in Gold.

Investment in gold is a good option if you have dead income & you are planning to invest in some other division to make your portfolio more diversified. In one of my previous blogs, I told you, 3 reasons why to do investment in gold.?.  Once you plan to invest in gold, the next question will appear, i.e which options will be profitable for gold investment.

Because normal people tendency is, they purchase gold in form of bars, coins, jewellery or purchase gold certificate from a certified seller. Now the scenario has changed. The investor has In many other options are available for gold investment.

In this blog, I’ll give you through comparison between each option, which give you better clarity about the investment of gold.

Let first understand the options available for investors.

1. Physical gold
2. Gold ETF (Exchange-traded funds)
3. Gold Mutual Fund
4. Sovereign gold bonds
5. Digital gold

Sr.No	Factors	Physical Gold	Gold ETF	Gold Mutual Fund	Digital Gold	Sovereign Gold Bonds
1	Charges (calculate % w.r.t to purchase price of gold)	Making charges (5%-10%, storage &security expenses (2%) & GST (3%)	Total cost would be (0.5% to 1%). This include ·       Brokerage ·       Expense ration	Total cost would be (0.5% to 1%). This include ·       Brokerage ·       Expense ration	GST & spread (i.e. processing & transactional charges)	No charges.
2	Minimum Investment Amount	Minimum INR 48000rs/- for 10gms (W.r.t current market rate).	Minimum investment INR 4800/- for 1gms. (W.r.t current market rate).	Minimum investment INR 100/-	Minimum investment INR 1/-	Minimum investment INR 4800/- for 1gms. (W.r.t current market rate).
3	Purchase/ Platform to invest in gold	From jeweller	GROWW, ET NOW, ZERODHA etc trading platform.	GROWW, ET NOW, ZERODHA etc trading platform.	Bank, GROWW, ET NOW, ZERODHA etc trading platform.	Post office, Through Net banking (Nationalize Banks) & ZERODHA Platform.
4	Seller	BSI trademark jewellery must purchase.	SBI Gold ETF; HDFC Gold ETF; UTI Gold ETF; Axis Gold ETF; ICICI Prudential Gold ETF; IDBI Gold ETF	Axis Gold Fund; Aditya Birla Sun Life Gold Fund; Canara Robeco Gold Savings Fund; HDFC Gold Fund; ICICI Pru Regular Gold Savings Fund.	Augmont gold, Safe gold & MMTC-PAMP India Pvt. Ltd.  (These are leaders in the digital gold market)	Through RBI you will get a digital gold certificate
5	Key Risk Factors	Theft, Purity Issues, Loss during manufacturing	Market risk related to the volatility of gold prices	Market risk related to the volatility of gold prices	SEBI & RBI doesn’t have control over the seller	Market risk related to the volatility of gold prices
6	Advantage	keeping physical gold for function then not a bad decision.	You can liquidate the gold at any point in time & redeem your money.	You can liquidate the gold at any point in time & redeem your money.	You can liquidate the gold at any point in time & redeem your money. But while the redemption seller will charge some amount.	You will get 2.5% interest of your investment every year. Earnings are free from all duties.
7	Disadvantage	You won’t get satisfactory amount while selling off your gold. Because Jeweller will consider their profit.	You will charge by short term capital gain or long term capital gain w.r.t investment period while redemption.	You will charge by short term capital gain or long term capital gain w.r.t investment period while redemption.	You will charge by short term capital gain or long term capital gain w.r.t investment period while redemption.	8 years locking period & prematurity can be done after 5 years.
9	Profitable investment option	Bad option for investment perspective	Good option	Good option	Not preferable in comparison with gold ETF, gold mutual fund & SGB.	Very good option if you don’t have a problem with the locking period.
10	99.90% 24Karate Gold certificate.	Purity will be doubtful & questionable.	You will get a certificate but you can not convert it to physical gold.	You will get a certificate but you can not convert it to physical gold.	You can convert in physical gold but some charges may apply.	You can get a certificate but you can not convert it to physical gold.

 Conclusion:

Choices of options will depend on everyone conditions. But if you want to invest money in GOLD in long run then prefer Sovereign Gold Bonds. Because you receive regular interest during the investment period, But you are looking for investment in the short run i.e. no more than 3 years, you can opt for Gold Mutual Funds or Gold ETFs, which have high liquidity and availability.