Best Ways to Invest in Gold | Sovereign Gold Bond vs ETFs vs Mutual Fund vs Digital & Physical Gold
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- čas přidán 14. 06. 2024
- Gold has been a financial support system over the years. Buying gold in physical form isn’t the only way of investing in it. In this video, ETMONEY Expert, Shankar Nath, examines the various ways in which one can buy gold.
Chapters:
00:00 Introduction
03:07 How to buy gold
05:23 Availability
05:55 Risk
08:43 Minimum Investment
09:57 Returns and Cost
15:22 Liquidity
17:35 Tax
19:26 ETMONEY Opinion
👉HOW WE USE GOLD IN OUR LIVES?
Gold can be divided into two major buckets
1. The Consumption bucket - Gold in the physical form. This includes jewelry, coins, wristwatches.
2. The Investment bucket - is a combination of different financial instruments like digital gold, gold ETFs, gold mutual funds, sovereign gold bonds, etc.
👉WHY and HOW TO BUY GOLD?
Why buy gold?
1. Gold delivers between 8 to 9% over the long term
2. Gold is a useful hedge against inflation and equities
How can one buy gold?
Gold can be bought in a physical format or in an electronic mode.
Physical gold: jewelry, gold coins, gold bars, or bullion.
Electronic format: Digital Gold, Gold Mutual Fund, Gold ETF, and Sovereign Gold Bond
👉AVAILABILITY
Physical gold, digital gold, gold mutual funds, and gold ETFs are available at most times. The only exception to this is the sovereign gold bond which is available periodically.
👉RISK
Physical gold comes with a lot of risks like the risk of theft, loss during the making, etc.
Digital gold isn’t regulated by any agency like RBI or SEBI. Hence the risk is quite high in this as well.
Gold ETFs, Mutual funds, and SGB’s are a far safer option as they are regulated either by SEBI or RBI.
👉MINIMUM INVESTMENT
In this section, we look at the affordability factor or the minimum investment required to buy gold
Physical gold’s lowest denomination is the 1 gram gold coin.
Digital gold can be bought for as low as Rs.1. In gold mutual funds, one can start investing through them for as low as Rs.100.
👉RETURNS AND COSTS
Physical gold has costs like GST, Making & design charges, and Storage charges. All these costs end up eating a portion of the returns. Hence the returns on physical gold are lesser than the other form of gold investments.
Digital gold too attracts a GST of 3% which eats into your returns. In addition to GST, there are many incidental costs like technology costs, hedging costs, insurance, and transportation costs. The digital gold companies manage these costs by using the difference between the gold buy price and the gold sell price. The Buy-sell spread is about 6%. which is pretty heavy.
Gold ETFs have brokerage costs, Demat account expenses, and an expense ratio. All put together, you’re looking at an expense of 0.5% to 1% when it comes to gold ETFs.
Comparatively, gold mutual funds have an expense ratio that is a tad higher than the ETF expense ratio. There is 0.5% to 1% ETF costs plus the gold mutual fund adds an additional 0.1 to 0.2% on top of it.
The sovereign gold bonds have no visible expenses. On the contrary, there is a discount of 50 rupees per gram if you complete the entire process online. In addition to no expenses, there is a fixed interest of 2.5% per annum they offer on your initial investment.
👉LIQUIDITY
Liquidity is not a problem in most products. You can physical and digital gold is sellable at any time and so is the case with your ETFs and gold mutual funds.
Sovereign gold bonds where there are some conditions and peculiarities that come in.
Sovereign gold bonds come with a maturity of 8 years. If you want to redeem these bonds earlier then you have two options
1. You can demat these bonds and offer them in the secondary market after 6 months of issue.
2. You can pre-maturely encash your bonds after 5 years without having to go through the secondary market.
👉TAX
Tax on capital gains is applied on the sale of physical gold, digital gold, gold ETFs and gold mutual funds.
If the gold is sold within three years and at a profit, it shall be considered as short term capital gain. This means the gains will be added to your income and will be taxed as per your applicable income tax slab.
If the gold is sold after three years and at a profit, then it shall be labeled as long term capital gain. Your long term capital gains will be taxed at 20% with indexation benefits.
In the case of the sovereign gold bonds.
All interest received on account of the gold bonds are added to your income and are taxed per your prevailing income tax slab.
If sovereign gold bonds are redeemed at the end of 8 years - which is the tenure of these bonds - all capital gains are entirely tax-free.
👉 To invest in Direct Plans of top Mutual Funds for free, download the ETMONEY app: etmoney.onelink.me/unJQ/5ca1ae3b
👉 Read article: www.etmoney.com/learn/mutual-...
#GoldInvestmentOptions
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I'm a simple man. Shankar Nath sir says "suscribe", and I do.
ETMoney makes the best videos on financial education. Thank you!
Thank you for the warm words, Abhishek Gowravajhala
This video is summary of 100 videos out there on CZcams about gold investment ...simply superb
This was a great video, i have seen a lot of people talking about sgb's and all on this space and i don't think so anyone compares to the depth and understanding that you have provided here. Thanks a lot !
Very good information.... Thanks. Gave us high clarity....
Thanks for your very clear and precise information
Clear and precise explanation.Thank you
Wonderful video. Every minute of the video is so informative. 👌
Very good and focused video without useless jittery.
Excellant Video! Thanks for detailed analysis on the options of Gold Investment
Really enjoy your well communicated & researched video 👏
Great video with wonderful insights! ❤️
Thank you so much!
One of the best videos on topic👌👌. Thanks
Thanks for providing the content , beautifully explained.
Glad you liked it! Thanks
So beautifully explained
Toooooo knowledgeable video.....all concepts are cleared in the simplest manner👍👍👍thankuuuui sooooooooo muchhhhhh 🙏
Most welcome 😊.. glad you found the content useful
Crystal clear explanation 👌💖👏
This video is pure gold. Struggling to find a useful video about investing in gold in an ocean of hindi videos. Thanks a ton ETMoney
Glad you enjoyed it!
Amazing research. New is Gold
Excellent video Mr.Shankar.
Thank u for spreading such a good amount of information about gold.
Thanks!
The most awaited insightful video.
Thank you Manish Soni
Thanks for the detailed interview.
Glad you enjoyed it!
Nice to learn all about Gold investment .
As always, very thoughtful & informative video.
Thanks!
good video we got to know better difference and what to buy.
very great video.. was looking fir such a detailed video on gold.. Thanks ET money and please keep creating more such videos.
Thanks, will do!
Thank you for sharing almost every aspect of gold investment segment 🙏
Our pleasure! Thanks for the appreciation
very balanced and educative video
Enjoy watching your videos. Very clearly communicated. Appreciate your speaker notes published with the video. Have you done any calculations in comparing sovereign gold bonds with Equity Mutual funds?
Thank you for your appreciation. We haven't compared SGB with equity funds as they are distinctly different asset classes. There is a video on Asset Allocation where we have given performance numbers spread over 15 years, it's one of our favourites and think you might like it. Thx again
Thanks sir, for providing such valuable information.
Most welcome. Glad you liked it
awesome video.. i was confused about the topic and now got the way forward for the same.!!!
Glad it helped! Thanks
Amazing video @Shankar! Thank you!
Thanks. Glad you liked it!
Very nice video and explained very nicely. thanks Shankar and team.
Our pleasure! Thanks you Kalpesh Pathare
Very informative. Thanks a lot.
You are most welcome!
Lucid explanation.... Superb
Thank you!
This is video is excellent, Mr.Shankar nath your explanation is crisp and to the point, Thank you very much
You are most welcome. Glad you liked it
Your styling of explanation is par excellence 👌
Thanks a lot 😊
Amazing video... neatly explained... 👌
Thanks a lot 😊
Excellent video and very clear comparison of various gold investment options. Thanks a lot for the video :)
Glad you liked it! Thanks Deepak Ganesan
As usual nicely explained, to add more value in my view if someone want to hedge his overall portfolio than physical gold in the form of coins or bars is best option. For saving taxes and earning higher return real state and equity are better placed. In case of extreme emergency only physical gold will act as an international curency. Actually we can say physical gold is real friend in case of extreme emergency, as Friend in need is a friend indeed.
Really good explanation with examples
Thanks
Thank You. very useful
You are welcome
Very nice video and content as usual ; Thank you
Glad you enjoyed it
Excellent analysis about Gold investment , Thank you sir
Good informative video.
Excellent analysis sir
Thank you very much sir very informative video
Great video
Thanks a lot!
Thankyou I was waiting for this video 😁
Most welcome 😊
For a layman keen to invest in Gold instruments, this video of Mr. shankar Nath was very informative and knowledge building. Now when I invest in Gold I know what I can best expect from my investments, best time horizons and how to capitalise on my investments in gold instruments.
Thank you
Nice explanation regarding the topic of Investments in Gold... I have become a big fan of yours... Thank you...
Thanks and welcome Nandan Banerjee
Extremely helpful. As a new investor this video was actually gold.
Thanks!
Very well explained..
Thank you so much 🙂
Very nice presentation sir
Extremely helpful 👏👏👏
Thanks
Thanks for your exhaustive analysis, sir.🙏
Always welcome. Glad you found it useful
Good One
Very informative video
Thanks
So much details about gold funds thanks a lot 😊
My pleasure 😊
Very informative
Glad it was helpful!
bible of gold investment .thanks sooooo much for far more insightful vid sir .thanks a lot
So nice of you. Glad you liked it.
Thanks for wonderful easy to understand explanation for the layman .. One question - What are the limits to purchase any of those Gold Instruments? especially soverign bonds. Thanks
Very good information and thank u for the video in english
Thanks and welcome
Very good ideas sir
Thanks and welcome
This video, though long, was an in depth analysis of investing in gold! This is a gold mine of gold investment wisdom. Liked, subscribed !
Glad you liked it!
Very good and informative video like your other educational videos. With respect to sovereign gold bonds, do the proceeds automatically get credited to the bank account of the investor after 8 years or the investor has to apply for redemption on completion of 8 years so as to receive the proceeds ?
thank you sir ....i started watching your videos during this lockdown and learning a lot. and you are doing fabulous job for us in increasing financial literacy. you told in this video at time 05.00 that you will provide link to article and interview with NIPPON amc fund manager . please provide the link.
thank you😊
Dear Sir ,
Thanks for the nice video and presentation , it was quite useful. I have few queries -
1. Since the gold prices are high , is it right time to invest in gold mutual funds .
2. How Much percentage of allocation should be in gold for balanced allocation in all.
3. Is there a co relation between debt mutual fund and gold fund as both move opposite of equity.
good info. thank u.
You're welcome. Thx
Could you clarify which of the gold investment options track the spot price of gold most closely? For gold ETFs & MFs, since they also invest in gold mining companies, it seems like there would be a larger tracking error compared to the other forms of gold investments (digital gold, SGBs).
And thanks for making a very informative video!
Hi Shankar, I like your videos quite much and do follow all ET Money videos. While there are many videos of gold by various channels. I am interested to know more about Silver, as it have industrial use as well. Can you pls do a video on Silver as there are not much investment options available for this white metal.
Thanks a lot to The Team ET Money, You are doing a great job towards Educating People... Once again thanks a ton to Shankar Nath sir & ET Money Team...
I request you to make a detailed video on New NAV rules applicable from Feb 2021...
Ty...
Thank you very much for your appreciation
Thank you for giving us your perspective on investing in Gold 👍
Thank you for giving us your perspective on investing of GOLD in English
Any time. Thanks!
Thank you for such a great analysis especially for people like me with low investment knowledge. ET Money rocks. Only issue observed that if you change your mobile number , it is very cumbersome process to get new mobile number updated. Else it’s all cool. Thank you for performing such research and sharing with us.
Most welcome. Thx!
Very helpful
Glad it helped. Thanks!
Thank you very much sir.
Welcome!
Thank u so much
I thought to buy digital gold. But had a doubt why buy and sell prices have difference. I watched some other videos but not cleared. This was cleared after watching this video. Thank you sir.
Thank you very much, SreeVidya Dwarsala. Glad we could help
@@ETMONEY Sir, if i want to buy gold after 2 years, is it good to buy digital gold in intervals from now (or) to buy physical gold after 2 yrs? In which case loss will be less? Can you give any suggestion when and which way would be better to buy gold?
@@ETMONEY Thank you sir for suggestion.
"gold standard videos", good one !!
Thanks Sameer Sah
As usual very informative and very insightful.
If time and your work schedule permits you guys, id love to see your people's take on Binary Options like IQ Options CFDs kind of derivatives etc.
Thank you Sailesh Ram. Unfortunately, we don't have expertise on binary options. If we get access to that and find someone then we'll try to have a session on this. Thanks for the suggestion
Detailed explanation, thank you sir, one doubt, if I purchase in secondary market, that 5yrs or 8yrs from the first buyer or from my purchase date? And secondary market official website ?
Sir, can you please make one video on how to convert existing Regular MF to Direct plans
Good info sir
Thank you
Thanks for making it clear as always. Would you be able to tell what are the option available to buy Sovereign Gold Bond from secondary market?
Thank you Paresh Bijvani. You can connect with your trading broker for this. They'll be able to help out on how to buy SGB on their platform.
Sgb is bought just like shares. In app of zerodha or upstox or any broker type Sgb u will get options like sgbmay28 sgbaug28 etc. On nse or moneycontrol search sgb
Great video and useful insights into gold investing options. Can I ask a question - if I buy a SGB in secondary market would I be entitled to the interest amount? How is RBI going to track who needs to get interest and if I redeem that with RBI only would it still be exempted from LTCG
@@ETMONEY Dear Sir I have bought sgb from secondary market . Process is just like buying shares. Interest is credited automatically to my bank account just like dividend of shares
@@mahesha6363 how did you buy?
@@MINATOYELLOWFLSH2005 have u ever bought any share in share market? Procedure is exactly same. At place of name of share type sgb u will get options like sgbmay28 sgbaug28 etc etc. Buy any of these. These all are sgb sgb***
I raised a ticket on Zerodha regarding the same and here is their reply - "The holder of the SGB will receive the interest and it will be credited to his bank account directly from RBI"
@@MINATOYELLOWFLSH2005 you can buy them on the stock market just like any other stock. Or you can buy fresh bond when RBI issues them. RBI doesn't issue new bonds all the time. The last issue ended in August. You will have to watch out for any further issuing seasons
Sir, sovergin gold bond where can i buy in secondary market?
Thank you so much for this information , if i bought a SGB from secondary market and hold it till redemption, will i be taxed?
What is the secondary market for the sovereign gold bonds? How can you buy gold bonds over there? Do you have to go to a bank or are they sold in stock market in demat form?
Love from prathamesh sir (Mps International )😚😚
does the value of gold moves like stock? can i say it will provide me gains in the long term, or is it just a hedge? if it is just a hedge, should i buy gold seasonally, whenever recession comes or stock market goes down?
Kindly reply me, which fund is good between axis/idfc/sbi banking and Psu debt fund? It will be very helpful for me.
Hi. If I buy SGB in the secondary market, will I still receive the 2.5% interest?
No link for the reference video has been attached nor the articles to be referred are mentioned either. Kindly, update the description. :)
Hi
Kindly clarify if Axis gold mutual fund expense ratio is 0.17 and axis gold etf expense ratio is 0.53 which is the best option to select for investing in gold. I heard investing in etf is cheaper, but expense ratio showing more in etf.
Sir can the sovereign gold bond bought from secondary market and sold to RBI at maturity or we need to sell in the same market... And what about the paperwork and storage to show to RBI when selling in case purchased from secondary market?
I have got cash which I am planning to invest for a short period may be 3-4 months because after which I may need it for my personal purpose. Can you please tell me if SGB is a suitable option to do that ? Thought of investing rather than to keep it idle for few months . What's your take on that
You have a video on Comodity Trading
Amazing 🧡 intelligence
Thanks for depth knowledge about sovereign gold bond. But I have one question:
If someone purchase sgb from secondary market then the interest is calculate on what value ( i.e. When sgb is taken through allotment process then interest is calculated on the allotment price but in case of purchase done through secondary market then interest is calculated on which amount and who is getting this interest one who get SGB from RBI or one who purchase from secondary market)?