Can anyone explain the process involved in gold buying?
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ICICIdirect Executive Thank you for the query. We would like to inform you that now invest in Gold in a smarter way through Gold ETF. Buying Gold ETF is purchasing gold in electronic form. You buy them just like you buy an online stock of any company.
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Sovereign Gold Bonds (SGBs) are government securities denominated in grams of gold. These bonds are issued by RBI on behalf of Government of India and are superior alternative to holding gold in physical form.
Investors subscribe to SGBs during primary issuance by paying the ongoing price* of Gold. Upon allotment, these bonds are securely held in demat form eliminating risk and cost of storage. On Maturity, Investors receive redemption proceeds basis prevailing price* of Gold. Thus, SGBs offer Gold linked returns to investors. Over and above Gold returns, investors receive fixed interest of 2.50% p.a. on investment value.
Though the tenure of the bond is 8 years, each tranche is listed on stock exchange and Investors can liquidate** their holdings before maturity. However, if held to maturity, capital gains tax^ arising on redemption to an individual is exempted.
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