Akshay Tritiya is a highly auspicious day for Hindus and Jains in India, and it is considered to be one of the best times to buy gold. There are various ways in which one can invest in gold on this day.
Here are some of the options and their benefits and demerits.
Digital Gold: One of the easiest and most convenient ways to invest in gold on Akshay Tritiya is through digital gold. This is a relatively new way to invest in gold, and it involves buying gold online in small denominations. Digital gold can be purchased through various platforms, including Paytm, PhonePe, Google Pay, and many more.
Prithviraj Kothari, managing director and CEO, RiddhiSiddhi Bullions Limited (RSBL), says: “Online modes of gold investing are 24 karats pure, safe, and stored in secured vaults. As the price of online gold is the same throughout India, you may buy and sell gold online at fully transparent, real-time market rates. Also, unlike physical gold, online gold may be purchased in much lower denominations.”
The biggest advantage of buying digital gold is that it is very convenient and accessible. It can be purchased anytime and anywhere, and there is no need to worry about storing the gold physically. However, the downside is that you do not physically own the gold, and there is always a risk of fraud or theft when dealing with online platforms.
Sovereign Gold Bonds: Another popular way to invest in gold is through Sovereign Gold Bonds (SGBs). SGBs are government-backed securities that offer investors an opportunity to invest in gold without having to physically own it. The bonds are denominated in grams of gold, and the minimum investment is one gram.
SGBs offer a number of advantages over physical gold, including tax benefits and a fixed rate of interest. Kothari explains, “SGBs also offer a fixed rate of interest of 2.5 per cent per annum, which is payable semi-annually. The interest earned on SGBs is taxable, but there is no tax on the capital gains made on redemption.”
However, the downside of SGBs is that they have a fixed term of eight years, and early redemption is not allowed. This means that investors cannot liquidate their investment before the maturity period, which could be a drawback for those who require liquidity.
Gold ETFs: Gold exchange-traded funds (ETFs) are another way to invest in gold. These funds are traded on stock exchanges and are backed by physical gold. Gold ETFs offer investors an opportunity to invest in gold without having to worry about storage and security.
The biggest advantage of investing in gold ETFs is that they offer liquidity and flexibility. The units can be bought and sold on the stock exchange, and the price of the units reflects the current market price of gold. However, the downside is that ETFs are subject to market risks and may not be suitable for risk-averse investors.
Physical Gold: Physical gold, in the form of jewellery or coins, is still one of the most popular ways to invest in gold in India. “Jewellery shops are usually open for 10-12 hours, and physical gold jewellery can be bought and sold during that time only,” explains Kothari.
The biggest advantage of physical gold is that it offers a sense of ownership and can be used for adornment and social status. However, physical gold also has some disadvantages, including the risk of theft or loss, storage, and security costs, and the need for physical verification of purity.
CONCLUSION
There are various options available for investing in gold on Akshay Tritiya, each with its own set of benefits and demerits.
Digital gold and gold ETFs offer convenience and liquidity, while SGBs provide tax benefits and a fixed rate of interest. Physical gold, on the other hand, offers a sense of ownership and can be used for adornment and social status. Investors should consider their financial goals, risk appetite, and liquidity needs before making a decision.
Regardless of the method chosen, it is important to invest wisely and ensure that the gold purchased is of high quality and purity. With proper research and due diligence, investing in gold on Akshay Tritiya can be a great way to secure one’s financial future
