What should you buy on Dhanteras: Gold ETF or Digital Gold:There is an old tradition of buying gold on the festival of Dhanteras which comes before Diwali. This tradition can also be seen as an opportunity to invest in gold. In the new era, apart from gold jewellery, there are also options like gold ETF and digital gold to invest in gold. Both Gold ETF and Digital Gold can be considered more modern and convenient ways of investing in gold as compared to physical gold. But which of these two options is better for you? Let us compare these two options so that you can invest wisely this Dhanteras.
Gold ETFs: Better Security and Control
Gold ETFs (Exchange Traded Funds) are mutual funds that invest in gold and are traded directly on the stock exchange. To invest in gold ETF you must have a demat account. Through this, you can buy or sell Gold ETF on the stock exchange at any time. The units of Gold ETF are backed by 99.5% pure gold, and are regulated by SEBI (Securities and Exchange Board of India), which increases the security on investments.
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Benefits of Gold ETF
– Security and Transparency: Gold ETFs are regulated by SEBI, which provides better protection to investors.
– Low Expenses: Gold ETFs have an expense ratio of only around 0.5%, making them less expensive.
– Liquidity: Since it is traded on the exchange, you can buy or sell it anytime.
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Disadvantages of Gold ETF
– Demat account required: To invest in gold ETF, you must have a demat account.
– Physical gold is not available: After investing in gold ETF, you cannot get physical gold directly. You will have to buy gold separately using the fund’s proceedings.
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Digital Gold: Easy option for small investment
Digital gold is such an option in which you can invest in gold even with a very small amount. This investment is backed by 99.9% purity gold, which you can buy through some online platforms or jewelers. In this type of purchase, you do not need a demat account, and you can start investing in gold with just Rs 1.
Benefits of digital gold
– Small investment facility: You can buy digital gold even for Re 1, which is a big facility for small investors.
– Converting to physical gold: Digital gold can be converted into physical gold, such as gold coins or bars, and even into jewellery.
– No demat account required: No demat account is required to invest in digital gold.
Disadvantages of digital gold
– 3% GST is applicable on purchasing digital gold. Apart from this, some platforms also charge storage fees.
– Digital gold is not directly monitored by SEBI or any other government regulator, which may increase the risk.
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Which option is better for you?
Both options have their own advantages and disadvantages, but it is important to choose the right option depending on your investment objective:
– Long term investment: If you want to invest for the long term and security and transparency are important to you, then gold ETF can be a better option.
– For small investment: If you want to invest on a small scale and with the intention of acquiring physical gold, then digital gold can be a better option for you.
What to buy this Dhanteras?
While deciding to invest on Dhanteras, it is important for you to keep your investment goals in mind. If you want a transparent, safe and long-term investment, then Gold ETF is a good option. On the other hand, if you want to start investing with a very small amount and later intend to convert your investment into physical gold, then digital gold may be better for you.
