Forms of Gold Investment in India

Nowadays, Gold is not only used as jewellery but also can be used for an investment purpose so that various luxurious needs can be fulfilled and also financial emergencies in Indian households can be tackled.
For creating transparency and avoid physical difficulties Online methods to own gold have also been developed.
 

Gold Investment options in India
 

1. Gold ETF’s
Gold Exchange Traded Funds or Gold ETFs are open-ended mutual fund schemes based on the ever-fluctuating cost of gold. The physical gold doesn’t generate income and the making charges too are high. Hence, they expose investors to the gold market. It is a good investment which can beat inflation in the long-term. Besides, gold is a less volatile asset than equities. One Gold ETF unit is equal to 1 gram gold.

2. Gold Schemes
The Government of India has recently launched three gold related schemes, the Gold Monetisation Scheme, Gold Sovereign Bond Scheme and the Gold Coin and Bullion Scheme.

(a) Gold Monetisation Scheme:- Resident Indians can deposit gold under Gold Monetisation Scheme. The deposit will be denominated in grams of gold with purity 995. The deposit will help the depositor earn interest at the rate of interest decided by the Central Government and notified by Reserve Bank of India from time to time. It works like a Savings account which will earn interest on the gold. GMS, which modifies the existing 'Gold Deposit Scheme' (GDS) is intended to mobilise gold held by households and institutions of the country and facilitate its use for productive purposes, and in the long run, to reduce country's reliance on the import of gold.
(b) Gold Sovereign Bond Scheme:- Under the Sovereign Gold Bond Scheme, the Reserve Bank of India will issue Gold Bonds on behalf of the Government of India.  They are substitutes for holding physical gold. Investors have to pay the issue price in cash and the bonds will be redeemed in cash on maturity.
(c) Gold Coin and Bullion Scheme:- Under the Gold Coin and Bullion Scheme, the government will issue gold coins, the first-ever national gold coins, which will have the Ashok Chakra engraved on them. Initially, coins of 5 grams and 10 grams will be available, soon to be followed by a 20-gram bar. The Indian Gold coin is unique in many aspects and will carry advanced anti-counterfeit features and tamper-proof packaging that will aid easy recycling.
 

3. Digital Gold
One can now purchase gold coins, bars, and jewellery online. 'Digital Gold', is offered on the mobile wallet platform of Paytm and 'GoldRush' is offered by the Stock Holding Corporation of India on their website, while Motilal Oswal has launched Me-Gold, a digital gold online investment. All of these are offered in association with MMTC - PAMP, (a joint venture between public sector MMTC and Switzerland's PAMP SA).

4. Jewellery
People certainly cherish possessing gold. But owning it in the form of jewellery has its own concerns about safety, high costs, and outdated designs. Then there are the 'making charges', which could prove to be a costly affair. The making charges on gold jewellery, which typically ranges between 6 percent and 14 percent of the cost of gold (may go as high as 25 percent in case of special designs) are irrecoverable. 

These schemes are aimed at bringing the gold lying with citizens into the economy, and at reducing India’s dependence on gold imports. The past few years have witnessed an exponential increase in gold imports exerting tremendous pressure on our current account. With the schemes being rolled out we should be able to reduce our gold imports. In order to make a decision to get clarity as to why you need to invest in gold - is it for marriage purpose or for pure investment. For investments, one should not have more than 10 percent of the total portfolio in gold. Choose between Gold ETFs or SGBs depending on how comfortable you are managing investments online and keep the worries of purity, security aside.