Gold ETFs: Expensive Gold is Still Within Your Budget! Learn What Gold ETFs Are, How to Buy Them, and the Benefits of Investing.

Gold ETF Investment: Gold ETFs are a great option for those who want to invest in gold but don't want the hassle of physical gold. Low investment amounts, better security, guaranteed purity, and easy buying and selling make it a smart investment.

Investing in gold has always been a top choice for Indians. Previously, people only bought physical gold like jewelry or coins, but times have changed. Today, you can also invest in gold digitally. Gold ETFs are one such smart option, allowing you to benefit from fluctuating gold prices without buying physical gold. The good thing is that even expensive gold can now be purchased on a small budget through this method. Learn more about it here.

What is a Gold ETF?

A Gold ETF, or Gold Exchange Traded Fund, is a type of mutual fund that tracks the price of gold. Investment in it is done through the stock market, and it is bought and sold on the BSE and NSE like shares.

You don't receive physical gold; instead, the investment is in electronic form. When you sell a Gold ETF, you receive money based on the prevailing gold rate at that time.

Major Advantages of Investing in Gold ETFs

1. Easy Investment with Small Amounts

Gold ETFs are bought in units. Typically, one unit represents 1 gram of gold. Even if you don't have a lot of money, you can start investing by buying one or two units. In contrast, physical gold requires a minimum expenditure of 4-5 grams. You can also invest in Gold ETFs through SIPs (Systematic Investment Plans).

2. No Security Worries

Buying physical gold comes with concerns about theft and safe storage. Gold ETFs eliminate this problem because they are held electronically in your demat account. You have to pay an annual demat account charge, but the worry about the security of your gold is eliminated. 3. Freedom from Making Charges

When buying jewelry, you have to pay hefty making charges along with the price of gold, which makes the gold expensive. There are no making charges in Gold ETFs. You only have to pay a brokerage of about 1% or less and an annual expense ratio of about 1%, which is significantly less compared to the cost of jewelry.

4. Complete Guarantee of Purity

The gold invested in Gold ETFs is 99.5% pure. In addition, the fluctuations in ETFs are slightly less compared to direct investment in the stock market, which keeps the risk under control.

5. Can be Used as Security for Loans

If you need a loan in the future, Gold ETFs can also be used as security. Also, they can be bought and sold instantly without any hassle when needed.

How to Invest in Gold ETFs

• To buy Gold ETFs, you first need to have a Demat account.
• After opening a Demat account, you can buy Gold ETF units available on the NSE or BSE.
• The amount for the units you buy is deducted from your bank account linked to your Demat account. These units are credited to your Demat account in one or two days.
• You can sell them anytime through your trading account.

FAQs

Q1. What is the difference between a Gold ETF and physical gold?
Gold ETFs are digital and held in a Demat account, while physical gold is in the form of jewelry or coins.

Q2. Can I invest in Gold ETFs through SIP?
Yes. Many Gold ETFs allow investment through SIPs.

Q3. What is required to buy Gold ETFs?
A Demat and trading account are required.

Q4. Is a Gold ETF a safe investment?
Yes. It guarantees 99.5% pure gold, and there is no risk of theft.

Q5. Does it take time to sell Gold ETFs?
No. Like shares, they can be easily and instantly sold.