Indians love Gold and the idea is to give an alternative to investors who invest in Physical Gold. The scheme has been approved by the cabinet committee.
As of now anyone can invest in Gold through any of the following products:
1. Gold ETFs :
This was most cost effective way to invest in Gold
2. Gold Savings Mutual Funds :
This invests in Gold ETFs and is more expensive than ETFs
3. Gold Futures on exchanges
4. Jeweler’s investment schemes:
Where you pay monthly instalments and finally buy jewelery at the time of maturity
5. The Sovereign Gold Bond Scheme :
This is more efficient way than all the above products.
In case of Gold ETFs & Mutual savings Funds, you pay fund manager ( about 1% to 2% every year) to manage the funds while in case of Gold Bonds you would earn interest. So, govt expect money from these 2 products to move to Gold Bonds.
Sovereign Gold Bond Scheme would suit investors who invest in Gold for the purpose of diversification of investment portfolio (in form of Gold ETFs or / Gold savings Mutual Funds).
Anyone can gain in 2 ways
1. one you can play on the price of gold
2.Second u get interest on the gold held.
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