How to invest in gold with little money?

Gold has always been a crowd-puller. Many Indian families purchase physical gold either in the form of gold coins or jewellery. However, with the current prices of the yellow metal ( worth of Rs 50,000 for 10g), coupled with the financial difficulties and liquidity issues several people had to face owing to the pandemic, how does one purchase gold this time?

Turns out, you don’t have to wait to accumulate a large amount of money to buy gold. Today, digital gold, gold ETFs, gold mutual funds, SGBs and other avenues of gold investment are highly accessible to people, even to those lacking any experience in the field of investments.

Thus, when the immense prices of gold create difficulties in physical ownership, you can choose to acquire the metal digitally for you and your loved ones against minimal costs this festive season. Here’s how:

Digital gold is a convenient and cost-effective way of purchasing gold online in small fractions (as low as Rs 10 ) You can buy, sell and accumulate gold of 99.9 percent purity anytime at the prevailing market price. The digital gold you purchase is stored in secured vaults and insured. Certain investment platforms also allow you to acquire your owned asset in physical form. Besides this, the increased convenience for people, especially those with no prior knowledge of investments, is an added benefit for digital gold. Today, almost anyone with a smartphone can start investing in gold from the comfort of their homes.

Gold exchange-traded funds are bought and sold directly through the stock market. Thus, owning such a gold asset on paper is almost similar to physical gold ownership. The prices of the gold stocks closely resemble those of its prices in the market as well. All you need to start investing in ETFs is a Demat account.

These funds invest in gold reserves directly or indirectly. They usually invest in stocks of mining companies, physical gold, and stocks of gold producing and distribution syndicates. The performance of these funds is usually linked with the performance of gold prices in the country.

SGBs are issued by the Reserve Bank of India, offering assured returns of 2.5 percent every year. The minimum amount that you can invest in these bonds is equal to that of the value of 1 gm gold.

However, such bonds are not available at all times. Instead, the RBI opens periodic windows during which it sells these to investors. However, this investment makes for a viable option if you are looking to invest for the long-term. The maturity term for SGBs is 8 years.

Apart from these, many jewellers across the country offer gold savings schemes that allow people to invest in instalments. Typically, a jeweller allows you to deposit a fixed amount every month for a specific period. At the end of the tenure, you can buy gold from the same jeweller at a value equal to the amount deposited plus a bonus (if offered by the jeweller). The gold can be purchased at the prevailing gold price upon reaching maturity.

As you can see, gold ownership is no longer limited to what you have in your bank and home lockers. You also need not spend lakhs on securing the gold for ownership. Today, through investments with nominal expenses, the prospect of owning the precious metal has undergone a massive transformation. Therefore, this season, give digital and paper gold a shot!