Gold Prices are increasing and you must be planning to buy Gold. Well, Now you have the option to buy gold in paper form also. Yes, I am talking about Gold Schemes which are launched recently by Prime Minister Narendra Modi. Name of these schemes are (1) Gold Monetisation Scheme (2) Sovereign Gold Bonds and (3) Indian Gold Coin Scheme.
Gold Monetisation Scheme
The Gold Monetisation scheme is also known as GMS. GMS allows an individual to deposit the gold with the bank. The bank will be paying interest on the deposited gold. This is a very good way to convert unproductive asset gold into production assets.
Sovereign Gold Bonds Scheme
The Sovereign Gold Bond Scheme is also known as SGBS. Under SGBS, gold bonds will be issued to investors in paper or demat form. The return on these gold bonds will be directly linked to the gold price.
Also Read – MCX Gold Option – How it works?
Indian Gold Coin Scheme
As a part of the Gold scheme new gold coin with the National Emblem of Ashok Chakra on one side and Mahatma Gandhi on another side will be available to investors. This gold coin will be available in 5 gm and 10 gm denomination. These coins will be distributed through designated and recognized MMTC outlets.
Before making an investment in these schemes let’s compare features of these schemes.
Gold Schemes by Government – Good for Investment?
The recent Gold Scheme launched by the government of India is a welcome step. This scheme will be definitely beneficial to the investors as well as the economy of the country.
Investor Benefits of Gold Schemes –
- Gold will become a productive asset as it will generate interest up to 2.75%.
- Gold scheme will be an additional alternative to purchase gold.
- The Investor need not worry about the purity of Gold
- The Investor need not worry about physical security and storage of gold.
- Tax Benefits applicable to gold monetization scheme.
- An investor can convert gold into cash using this channel.
Benefits to Government and Economy –
- Gold import is expected to reduce. Foreign currency reserves will be saved. It will boost the economy.
- The banks will be able to raise loans using this gold as a security in the foreign market.
- This gold can be sold to generate foreign currency and it will increase foreign reserves.
Gold Monetisation and Sovereign Gold Bonds Scheme are good schemes for investment and definitely help investors. However, your portfolio should not exceed 10% of the gold investment. If you have already invested 10% in gold you should not buy gold.
