EN
Gold has always been a preferred investment, but the way people invest in it has changed over time. While physical gold in the form of jewellery, coins, or bars is still common, it comes with concerns around purity, storage, safety, and higher upfront costs.
Online gold investment offers a simpler and more convenient alternative. It allows investors to buy pure gold online in small amounts, without worrying about storage or security. You can invest anytime, track prices in real time, and sell or redeem your holdings easily. This makes it a practical option for those looking to invest in gold without the challenges of holding it physically.
Key Takeaways
-
Gold ETFs monitor market prices and need a Demat account; they provide liquidity without physical storage.
-
Sovereign Gold Bonds pay 2.5% yearly interest plus price appreciation and tax breaks.
-
Gold mutual funds invest in gold-related assets and are professionally managed, needing no Demat account.
-
Online gold investment offers better access and liquidity as you can buy, sell, or redeem your investment anytime.
How to Buy Gold Online? Gold Investment Plans
Investing gold online has become much easier with many platforms offering multiple options to suit different goals. If you are exploring how to buy gold online, you can choose between market-linked instruments and digital formats without dealing with the challenges of storing physical gold. Each method works differently in terms of returns, risk, liquidity, and holding format. Below are the main gold investment plans available online, explained simply.
Gold ETFs (Exchange Traded Funds)
Gold ETFs track the market price of gold and are traded on stock exchanges like shares. You invest in gold without holding it physically, as the value is backed by gold held by the fund. A Demat account is required, and prices move directly in line with gold rates.
Gold Mutual Funds
Gold mutual funds invest in gold-related assets such as gold ETFs or companies connected to gold mining. These funds are managed professionally and do not require a Demat account. Returns depend on fund performance and management strategy, not just gold prices.
Sovereign Gold Bonds
Sovereign Gold Bonds are government-backed securities linked to gold prices. They offer fixed annual interest along with price appreciation. These bonds suit long-term investors who want safety, periodic income, and tax efficiency without storage concerns. However, it’s important to note that SGBs are no longer offered. The last issuance was in February 2024.
Also Check: Gold Commodity Price
Features of Online Gold Investment:
Some of the features of investing in gold online are as follows:
-
Investing gold doesn’t require substantial capital. You can invest with a manageable amount; however, the minimum and maximum amount varies depending on the mode you choose.
-
You can own gold in decimals (e.g., 0.005 grams), making it possible to build a portfolio through small, regular contributions (SIPs).
-
Online gold typically has no making or wastage charges, though GST and other tax may still be applicable.
-
You can sell your gold back to the platform at any time with a single click. The proceeds are usually credited to your bank account within minutes or a few business days.
-
Most digital platforms allow you to buy or sell gold anytime, regardless of whether a physical jewelry store is open.
How To Buy, Sell, And Redeem Online Gold Investment?
The online buying and selling process is quite simple. Besides, it offers round-the-clock access to your account so that you can buy or sell anytime. Here is a quick overview of the process that you need to follow to buy, sell, and redeem online gold investment.
To Buy
For Gold ETFs, you can purchase units through your trading account during market hours, just like buying shares. For Gold Mutual Funds, you can invest a lump sum or start a Systematic Investment Plan (SIP) through a fund house or investment app. If you are purchasing Sovereign Gold Bonds (SGBs), you can apply through your net banking portal or a brokerage firm during the government’s specified issuance windows.
To Sell
One of the primary advantages of online gold instruments is high liquidity. Gold ETFs and Gold Mutual Funds can be sold on any business day at the prevailing market Net Asset Value (NAV) or exchange price. Once you sell your units or units of a fund, the proceeds are typically credited directly to your linked bank account or brokerage wallet within the standard settlement cycle.
To Redeem
Redemption depends on the specific instrument you hold:
-
Gold Mutual Funds/ETFs: These are generally "cash-settled," meaning you redeem your units for their equivalent monetary value based on current gold prices.
-
Sovereign Gold Bonds: These are redeemed automatically in cash upon maturity (after 8 years), with the payout calculated based on the average closing price of gold.
-
Physical Conversion: While most online instruments are designed for financial returns, some specialized gold-backed schemes allow you to exit your investment by opting for physical delivery in the form of certified coins or bars from authorized partner outlets.
It’s important to note that the process to buy, sell, and redeem can vary depending on the mode and platform you choose.
What Documents Do You Need to Invest in Gold?
The documents required to invest in gold depend on the mode of investment you choose. Generally, basic KYC details, PAN and identity proof are required. For market-linked instruments like Gold ETFs, you will additionally need a Demat and Trading account, which involves linking your bank account and providing a cancelled cheque for verification.
If you are opting for Sovereign Gold Bonds, the application typically requires a nomination form and address proof to ensure the holdings are correctly registered with the issuing authority. Maintaining updated documentation ensures that your investment remains liquid and that any interest or sale proceeds can be seamlessly credited to your bank account.
Conclusion
To the Indian’s, gold is more than just a means of investment. It is often associated with social status and financial well-being. However, the gold price has always maintained an upward trend. In recent times, there has been a steep rise in its price, which has made it difficult for many to invest in physical gold. Moreover, when you are buying physical gold, you need to concern yourself with its purity, making charges, and additional charges and taxes, which often push the price further up. However, investing online in gold also saves you from the hefty charges of making ornaments. Most importantly, it allows you to accumulate and redeem gold in parts. There is also the ease of buying the product online from anywhere. These qualities have made the product popular across a spectrum of Indian society.
