Every family mainly middle-class families and upper-middle-class families want to invest in business or assets which provide the investor a good returns and profits. Investments have many options such as the stock market, nifty 50, mutual funds, gold investment, real estate, and government schemes. In these many investment options. Although some people who are into investment prefer few are the safest investment options. As per the investors all over the world the time you have, the mindset you have and the money you wanted invest help to choose your path of investment.
First, let us know about high returns giving investments in the last 5 years. Gold is the ultimate winner among all the investment options. Yeah, you read it correctly not the stock market or real estate it’s gold which has risen 100% in the last 5 years. As a compound annual growth rate in 5 years it increased by 15.8% Per annum. It is a huge platform of investment and has many options such as physical one, digital and bonds.
Investment options:
Let’s, know about all these investments and discuss which is preferred for the short term and which is long-term. Most Indian families buy gold for their children’s marriage for those people, I would suggest the most efficient and return providing investment. I know some of the readers doubt why gold is the only option for investment. Because we have the stock market and other options which have some risk, but we get high returns. But as per the rule of investment, all the money shouldn’t be stagnated in one investment. If all your money stagnates, it creates a problem when that market goes down. The investment money must be diversified into multiple sectors, So the money we invest will be safer.
There are multiple gold investment schemes options there are:
- Physical one
- Gold ETF ( exchange-traded fund)
- Digital
- Funds
- Sovereign gold bonds
I fell into a dilemma while seeing these investment options, for what to choose and which would give me good returns. For this reason I have researched a little for you people to deliver the best option for investment.
1. Physical:
There are many types for physical gold such as jewellery, coins, and biscuits. In fact most of them buy jewellery and use them regularly. The most concerning thing for the investment here is the storage problem. If we store the gold in our homes, it is a big risk for the people. And bank lockers charge an amount to store them in our personal bank lockers. Also, there is a tax LTCG (Long Term Capital Gains) that collects about 20% of profits, and there are making charges for the jewellery.
While physical gold is only preferred for the one who wants the urge to have jewellery and wear it. These types of people go for it.
And the one who wanted it as an investment for their children and future usage. Buying a physical one is the wrong option. And the people who wanted to sell their jewellery shop-imposed GST, making charges. People lose nearly 20% to 30% in the name of taxes.
2. Digital gold investment:
I have personally used digital option as an gold investment scheme. Most platforms like Google Pay and Navi are promoting this investment options. I was trapped into investment, it seems to be a good investment option. But when it comes to reality digital gold has higher charges. It’s not a good investment option because we have other better investment options. I don’t prefer digital one as an investment option.
3. Funds gold investment:
It sounds near to mutual funds it is similar to them. These funds are managed by some of the companies. These companies charge a minimum amount from customers. This option is better than physical one and digital one but not the best in gold investment. These are the gold-related mutual fund schemes which eventually invest in ETF.
The difference from the gold ETF, this gold funds are not listed in the stock market. So, one doesn’t need to have a demat account to invest in gold funds. There is no option of converting this funds into physical one.
4. Gold ETF:
As of now discussed gold investment schemes ETF is the best one. Where one can invest it for just 50 rupees. The charges for this type of investment are very low when compared to other options. Gold exchange-traded funds which are related to the stock market but not companies which are in the market, but those that are related to gold. One needs to have a demat account and trading account to purchase their ETF. In this ETF one can buy gold as per today’s price and make it physical in future.
The liquidity of this gold ETF is very high, at any point in time we can get back our money from this ETF. Storing the purchased gold in digital format in a demat account eliminates security concerns.The fund manager in the ETF invests our money in gold-related industries only. Investors exclusively invest in gold, sourced from banks and approved by RBI, ensuring it is 99.5% pure.
5. Sovereign gold bonds:
The star performer in gold investment schemes option with low charges. All the benefits are present in SGB also. In addition to this SGB provides the customers who buy the SGB will get 2.5% annual interest and 0 tax on the profits at maturity. Sovereign gold bonds are given by the government and RBI combinedly. These RBI-issued SGBs are guaranteed by the Indian government.
The 2.5% interest, attractive and beneficial, deposits twice a year into your bank accounts. These bonds serve as security for obtaining loans from banks. This is the ultimate option for the long-term investment where the maturity period is 8 years. We can convert the SGB into a money deposit in our demat accounts and perform trading.
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