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Introduction
Investing in Gold has always been considered prudent in India. India is the world’s largest importer of gold, with an annual consumption of 800-900 tonnes. India’s gold imports in the first quarter of the current fiscal increased by 35.5% from a year ago to $11.45 billion, as per official data. Imports were $8.45 billion in the same period of 2018-19.
Consumers can invest in Gold in different ways. Though gold jewellery is the most popular form of investment, they are now opening up to other methods like Gold ETFs and Gold Sovereign Bonds. These modern instruments allow consumers to invest in Gold without having to purchase physical gold. This results in increased security and removes the hassle of storing and securing physical gold. They have also proved to provide better returns compared to plain gold jewellery, which attracts depreciation while selling.
HDFC Bank Gold Schemes
HDFC Bank offers a few different Gold Investment Schemes. It allows customers to purchase Gold coins and bars, Gold ETFs or Gold Sovereign Bonds. These non-traditional gold investment schemes offer higher returns and better manageability to the customers as against investing in traditional gold jewellery.
Gold Coins & Bars
This is the easiest form of purchasing gold. You can approach your nearest branch of HDFC Bank to purchase gold coins or gold bars in their physical form. They can buy gold coins or bars from designated HDFC Bank branches.
Customers can also purchase the Indian Gold Coin, that is promoted by the Government of India and is the only BIS Hallmarked gold coin in India. It is embossed with the Asoka Chakra on one side and Father of the Nation, Mahatma Gandhi on the other side. It comes in 24 Karat purity and is available in 5gm, 10gm and 20gm tamper proof packs.
The tamper proof packaging and advanced anti-counterfeit features on the coin cover makes it very safe and easily recyclable. It can be purchased only through debit to your account. It is available in the following cities:
Agra | Faridabad | Mangalore |
Ahmedabad | Ghaziabad | Mumbai |
Bangalore | Hyderabad | Noida |
Bhubaneswar | Indore | Pune |
Chandigarh | Jaipur | Raipur |
Chennai | Kolkata | Trivandrum |
Cochin | Kottayam | Vadodara |
Coimbatore | Lucknow | Varanasi |
Delhi | Ludhiana | Vijayawada |
E-Gold by HDFC Bank and SafeGold
E-gold is investment made in physical gold. It is offered by SafeGold - a product of Digital Gold India Private Limited - and is a third party product. HDFC Bank acts as a payment gateway in facilitating these transactions. Investing in E-Gold online is an easy, convenient and secure way to purchase physical gold. In this scheme, investors can buy and accumulate pure gold anytime, anywhere, in fractional quantities. Every gram you purchase is backed by actual physical gold. It will be insured and kept safely with an Independent Custodian (Brink’s vaults) on a consolidated basis. You can sell this gold on your Netbanking account or exchange them to purchase jewellery with jewellery partners.
Customers can follow this path to invest in E-Gold:
Login to NetBanking Click on BillPay & Recharge Invest Gold
You can call 888 1000 800 for more details.
Gold ETFs
Gold Exchange Traded Funds (gold ETFs) are funds that invest predominantly in gold, and which can be bought and sold on the exchange. Gold ETFs are basically open-ended mutual fund schemes focused on frequently fluctuating gold prices. Gold ETFs have been proved to be more profitable than physical gold. They not only guarantee the investment in the yellow metal but also provide stability and liquidity to the investors.
Benefits of investing in HDFC Gold ETF:
- Diversification: Diversify and secure your investment in a safer investment calls
- Safe & Secure: No hassle of securing or storing physical gold as ETFs are held in demat account
- Liquidity: Easily buy or sell gold at any point of time
- Beat the inflation: Protects against inflation and currency fluctuation
- Low risk rating: The investment is low-risk and ideal for those who would like to diversify their portfolio.
- Flexible purchase options: Buying online Gold ETFs is easy and flexible. You can purchase as little as 1 gram of gold.
Where can I buy HDFC Gold ETFs?
HDFC Gold ETFs can be purchased via the following channels - HDFC Securities Online Trading Platform / HDFC Securities Call & Trade / Dedicated Dealer desk in your city / Trade on HDFC Securities Mobile App
Comparison of Gold ETFs Vs Gold Bars Vs Jewellery
Jewellery | Gold Bars | Gold ETFs | |
Purchase | You have to pay making charges ranging from 5 -20% | Banks charge 10-20% mark-up charges | Brokerage of 0.5% or even less |
Sell | Loss of making charges, value add charges & taxes | Banks do not take it back, so premium paid at time of purchase is written off | Brokerage of 0.5% or even less |
Maintenance | Hassle of storing them. Lockers and insurance charges to be incurred. | Hassle of storing them. Lockers and insurance charges to be incurred. | 1.00% |
Tax Implications | Need to pay Long term capital gains tax after 3 years, plus wealth tax | Need to pay Long term capital gains tax after 3 years, plus wealth tax | Long term capital gains tax |
Sovereign Gold Bonds
Sovereign Gold Bonds are the safest way to buy digital Gold, as they are issued by Govt. of India, you not only benefit from possible Asset appreciation opportunities, but are also assured 2.50% per annum interest.
Highlights of HDFC Bank Gold Sovereign Bonds:
- Safest way to buy and store gold
- Offers an assured interest of 2.5% per annum on the investment
- Appreciation of asset along with accrued interest
- Issued by Government of India and is tradeable on the Stock Exchange
- No TDS applicable
- Can be used as collateral for Loans
- Eligible for conversion into Demat form
- Conveniently invest through NetBanking and HDFC Bank Demat Account
- Indexation benefit if bond is transferred before maturity
- No Capital Gains Tax on redemption
Features of HDFC Gold Sovereign Bond Schemes:
Item | Details |
Product name | Sovereign Gold Bonds |
Issuance | To be issued by Reserve Bank of India on behalf of the Government of India |
Denomination | The Bonds are available in multiples of gram(s) of gold starting from 1 gram |
Tenure | The tenure of the Bond will be for a period of 8 years with an exit option in 5th year, to be exercised on the interest payment dates. |
Minimum size | Minimum investment is 1 gram of gold. |
Maximum limit | The maximum limit of subscription shall be 4KG for individuals, 4Kg for HUF and 20KG for trusts and similar entities per fiscal (April-March) notified by the Government from time to time. A self-declaration to this effect will be obtained. The annual ceiling will include bonds subscribed under different tranches during initial issuance by the Government and those purchased from the Secondary Market. |
Joint holder | In case of joint holding, the investment limit of 4KG will be applied to the first applicant only. |
Issue price | Price of Bond will be fixed in Indian Rupees on the basis of a simple average closing price of gold of 999 purity published by the India Bullion and Jewellers Association Limited for the last 3 working days of the week preceding the subscription period. The issue price of the Gold Bonds will be Rs.50 per gram less for those who subscribe online and pay through digital mode. |
Payment option | Payment for the Bonds will be through cash payment (up to a maximum of Rs. 20,000) or demand draft or cheque or electronic banking. |
Issuance form | The Gold Bonds will be issued as Government of India Stocks under GS Act, 2006. The investors will be issued a Holding Certificate for the same. The Bonds are eligible for conversion into demat form. |
Redemption price | The redemption price will be in Indian Rupees based on a simple average closing price of gold of 999 purity of the previous 3 working days published by IBJA. |
How to buy? | HDFC Securities Online Trading Platform / HDFC Securities Call & Trade / Dedicated Dealer desk in your city / Trade on HDFC Securities Mobile App |
HDFC Gold Schemes FAQs:
1. How much gold can one invest under the HDFC Sovereign Gold Bond
An individual can invest up to 4KG gold under the Sovereign Gold Bond, a Hindu Undivided Family or an HUF can invest up to 4 kgs of gold under the HDFC Sovereign Gold Bond. A Trust or similar entity can invest up to 20KG per fiscal year.
2.If I already have an HDFC Bank account and an HDFC Demat account, can I use these accounts to invest/trade online?
Yes, you can link your existing accounts with your HDFC securities account so you can trade online. You can link up to 5 Bank accounts and/or up to 5 Demat accounts with your HDFC Securities account.
3. What are the ways in which I can trade or invest with HDFC Securities?
You can trade through multiple channels like HDFC Online trading, Trade on Mobile, Low Bandwidth Sites (LITS) & Call ‘N Trade.
4.Are there any call charges to use the Call ‘N Trade facility to trade in securities?
The Call ‘N Trade facility is free of charge. You can place orders over the phone any number of times.
5. What is the minimum & maximum purchase amount for the E-Gold plan?
The minimum amount of purchase is Re.1 and maximum amount is Rs 100,000.
