Gold is one of the most loved investments in India. We buy it as jewellery, coins and biscuits. The metal is popular because it offers one of the best hedges against inflation, and is therefore a must-have, especially during times of economic uncertainty.
Diwali is around the corner, and you may be considering investing in gold. Here are some smart alternatives in case you want to reap the benefits of having gold in your portfolio but don’t want the burden of owning it in its physical form.
Sovereign Gold Bond (SGB)
When you invest in traditional gold instruments, you experience only one type of value appreciation, which is through capital gains. Investors often go through periods where gold prices remain subdued and there are no returns in the short and medium term. In fact, market volatility may even cause short-term losses. The Reserve Bank of India recently launched SGB scheme which allows capital appreciation and also the added bonus of interest returns on your investment. The interest on SGB is currently fixed at 2.75% per annum.
