Is Gold Bond Better, Gold ETF Profitable? Which is the right choice for investment?

by time news

First Published Dec 20, 2022, 2:40 PM IST

Investing in gold is the safest. As there are many types of investment in gold today, the investment we make should be safe and at the same time profitable.

Gold is a fast liquid asset. It is seen as an international commodity that can be accepted by any country. Therefore, investing in gold is essential to make it safe and profitable in the short term as well as in the long term.

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Which is a better investment option between sovereign gold bonds and gold exchange-traded funds?

In today’s environment, instead of buying gold directly, buying and investing digitally has increased. Even if you buy gold digitally, the interest you get from it will be regular.

These include Gold Bonds issued by Reserve Bank and Exchange Traded Bonds issued by Mutual Funds called Gold ETFs. Let’s see which of these two schemes will be profitable and profitable for us to invest in.

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GOLD ETF

Gold can be invested in gold ETF through mutual funds i.e. gold can be invested in demat account form or in paper form. You can start a demat account with Gold ETF and invest and trade in gold from one gram to as many kilos. In this way the investor does not need to worry about storing gold and fear of theft. Gold is in demat form

Which is a better investment option between sovereign gold bonds and gold exchange-traded funds?

If we invest in this way, we can trade gold electronically rather than buying it directly. While investing in gold ETFs, short-term gains are taxable if sold within 2.5 years.

Long term capital gains tax of 20% is payable if held and sold for more than two and a half years.

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Investors who want to be able to cash out their investments at any time and want the flexibility of trading in equity markets can opt for Gold ETFs.

Sovereign Gold Bonds

The Gold Bond Scheme is issued by the central government on behalf of the Reserve Bank. In this, individuals can invest up to 4 kg from one gram of pure gold and trusts and organizations can invest up to 20 kg.

Which is a better investment option between sovereign gold bonds and gold exchange-traded funds?

This investment will earn minimum interest. After this investment period, the money will be paid based on the value of the gold

Those who want to invest for a long time and want to get tax benefits can opt for gold bond scheme. This scheme earns only 2.5% interest twice per annum. These gold bonds are available on 8 years basis and we can get benefits from 5th year onwards.

Those who want to get fixed interest income can save in gold bonds. As this scheme is run by the central government, the investment is safe without any problem. Once the gold bonds mature, no tax is charged on those benefits.

Last Updated Dec 20, 2022, 2:40 PM IST

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