How to Buy Gold This Diwali

If you are looking for Buying gold this Diwali, you are in the right place. I will tell you how to buy gold this Diwali. Indians are crazy about gold, they can buy it at any given time. During the festive season, people buy gold in two forms, one is the gold jewelry and another is the physical gold in form of coins and bars. Buying coins and bars have added the advantages like you can buy it in a small quantity as low as 0.5 grams and it can be stored as an investment for long-term.

There are many ways you can buy gold nowadays. With the help of the internet, it has become very easy to buy gold like you are doing online shopping. In this article, we will discuss the things you should know and consider before buying gold from the store or online.

How to Buy Gold in India?

Well, most of the people buy gold from the shop they are buying since ages. Why they buy from the same place every time? Because they trust the shopkeeper on the purity of the gold they are buying. Purity is the main thing people are checking while buying gold from the shop. So if once they trust any shop on the quality and purity of the gold, they will buy it from the same shop again and again without any hesitation.

7 Ways to Buy Gold

  1. Buy physically from jewelers and banks
  2. SIP schemes from jewelers
  3. Buy online (e-Gold)
  4. Gold ETF
  5. Gold funds (mutual fund schemes which invest into gold)
  6. Equity based gold funds
  7. Gold futures and options

Here are the things you should check before buying gold.

Purity:

This is the main thing you should look for while buying gold from online or offline(store). You can check the purity of the gold in two ways. first, Karat and second is fineness. Most of the time we check the Karat of the gold for purity. 24 Karat is the best and purest gold. It means the gold contains 24 out of 24 parts of gold. Same way if you are buying 22 Karat gold, means 22 karat is gold portion and 2 is another metal such as zinc or silver etc.

For jewelry, there is 22K gold is preferred as it helps to shape the ornament as per the design. Making ornaments from 24 Karat is not possible as it will not be possible to mold it in the desired design.

The second measure is fineness which is measured on the scale of 1 to 1000. 1000 is the highest level of purity. The purest gold contains the impurities which a manufacturer is not been able to remove. The purest gold of 24 karats is measured as 999.99 against the highest benchmark of 1000.

So if you are buying a 24 Karat gold make sure it is 999.9 on the fineness parameter.

The below table can help you know the fineness number corresponding to different purity levels.

Gold purity in jewelleryFineness Number
22KT22K916
18KT18K750
14KT14K585

 

Hallmark:

The government of India has set up the Bureau of Indian Standards (BIS) to ensure that the consumers are not cheated while buying gold. The Hallmark is embossed on the gold item to certify its purity.

Hallmark is done on the specific karat of gold. The same can be tested at the hallmarking center to check its purity.

How to buy gold online in India?

There is an option to buy gold online through e-tailers, banks and the stock holding corporation of India. you can buy gold from these sources easily. Buying gold online is as easy as buying a book online.

In India, there is the stock holding corporation who offered to buy gold in a digital form rather than buying in physical form. Paytm and GoldRush offered digital gold. Let’s check them one by one.

Buying Gold through Paytm

Paytm offers to buy of gold online in association with MMTC-PAMP. The customer can buy gold for as low as Rs. 1 or in a fraction of 0.1 gram and so on. The gold bought through Paytm is stored into the MMTC vaults and these vaults are fully insured.

Features of Paytm Digital Gold

  • Buy gold either in rupees or in grams as per your convenience.
  • You can buy gold for as low as Rs. 1
  • Buy/sell gold even on the public holidays
  • The price of buy/sell is valid only for six minutes
  • The minimum quantity to redeem the digital gold into gold coin is 1 gram
  • Store digital gold for a maximum of five years, after that you need to redeem it to cash or into gold coin
  • You have to adhere to the KYC norms as soon as cumulative transaction value crosses Rs. 50000
  • If you are buying a gold for more than Rs. 2 lakhs, you need to furnish your PAN card
  • ID proof and address proof is required to buy gold through Paytm
  • Once you have placed an order (buy/sell) you cannot cancel it

Conclusion:

If you ask me, buying gold through ETFs are the best option, but we Indians are comfortable with physical buying as it gives us the sense of security that we got something in exchange of our money.

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