THE MONEY LOOK: Where to invest - gold, silver, or bank?

Monday, January 1, 2024

Where to invest - gold, silver, or bank?

Investments are made based on ability, need, age, and market knowledge. Long-term investments and short-term investments depend on the amount of liquidity you have. There’s an old saying ‘don’t put all the eggs in one basket but it fits perfectly for investment. Invest in your funds, future needs, risk factors, and trends.

In this time of weakness, when the world situation is changing at the moment due to the corona infection, it is natural for ordinary people to question where to invest their money.

Most of us are not economic analysts, nor do we have a good idea of the market, so knowing how to save money to secure our future becomes an important question.

Let us know from some economic analysts where money will be more secure -

Gold

Due to some influential factors like high liquidity and inflation potential, gold is one of the preferred investments in India. In the form of ornaments, you will buy gold in the form of jewelry, coins, or works of art. Nowadays the situation has changed you can buy gold ETFs, gold funds, sovereign gold bonds.

What are the sovereign gold bonds?

Sovereign gold bonds are the safest way to buy digital gold, as they are issued by the Reserve Bank of India on behalf of the Government of India at an interest rate of 2.50% per annum. Bonds are marked in gold units with a base unit of 1 gram. The maximum investment can be 4 kg. These bonds have an eight-year term with an exit option of eight years.

Top Gold Fund
Axis Gold Fund
Aditya Birla Sun Life Gold Fund
Canara Robeco Gold Savings Fund
HDFC Gold Fund
ICICI Pru Regular Gold Preservation Fund

Why invest in gold

For a traditional conservative investor, the main models are security, liquidity, and profitable income. You can expect to meet all of these criteria when investing in gold.

If you are not in favor of keeping physical gold, you can go for other choices.

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What documents do you need?

If you invest more than Rs 2 lakh in gold, you need a PAN card. In ETFs, you need to open an account with a brokerage firm and have a Demat account with the same firm. To place assets into Sovereign Gold Bonds, you need to buy physical gold (Aadhaar, PAN, Voter ID, or Passport) for the documents required for KYC.

Silver

Silver is a cheap and reliable precious metal. We have been using silver instead of gold for good deeds for years.

Small investment

If you plan to invest a few thousand rupees in silver, you might need to think about purchasing coins. Coins are usually added to the drawing and labor fee to the final value. It is a good option for salaried individuals and businessmen. You can deposit some coins every month according to your ability and it is also possible to sell them when you want to give up the investment. Another advantage of buying silver coins is their availability in banks. You will likewise get authentication of precision. Banks will only sell silver coins and not buy them later. You will need to go to jewelers to sell your silver coins if needed in the future.

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Choose silver bars for huge investments

You can bulk invest in these types of silver bars The market has a lot of demand for silver bars, you will have no problem if you want to sell later. Make sure you have enough money for extra needs. Silver coins and bars should always be purchased from reliable sources. Certified coins should be purchased from banks. Even if they charge some extra premium.

You should contact your local jewelers to talk about silver bars. One should always opt for a bank locker to keep the silver safe.

Silver rates vacillate consistently. There are many apps and other sources that will provide complete information about the latest silver prices in the market and you can use them on your mobile phone to get accurate information.

Bank

Most investors want to invest in such a way that they get a higher return as soon as possible without the risk of losing the original amount. In fact, hazard and return are straightforwardly related. . The higher the return, the higher the risk. Your money is always safe in the banks and interest is earned with little fluctuations.

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Bank Fixed Deposit (FD)

Bank fixed deposits are considered safe. Every investor in a bank is safeguarded up to a limit of Rs 5 lakh, for the principal fund and the amount of interest. Depending on the need, one can pick between a month to month, quarterly, half-yearly, annual, or cumulative interest. The interest rate earned is linked to the income and is taxed according to the income slab.

Public Provident Fund (PPF)

Any Indian citizen can open a public provident fund at a bank or post office for 15 years. Its interest is tax-free from income tax and is paid at the compound rate. The minimum amount to be deposited is one thousand per annum and the maximum can be made to one and a half lakh. The authority surveys loan costs every quarter. After 15 years you can extend it to 5 - 5 years.

National Pension System (NPS)

This is a government-sponsored pension scheme. It was dispatched in January 2004 for government representatives. In 2009, it was opened for all categories of society. The scheme allows regular contributions to the pension account during the career. After retirement, you can withdraw a portion of the money and receive the rest in a certain amount each month.

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Veteran Citizens Savings Project

Only senior citizens or early retirees can invest in this scheme. SCSS can be taken from more than 60 post offices or banks.

The term of SCSS is five years, which can be extended for another three years after the scheme matures. The higher investment limit is Rs 15 lakh and multiple accounts can be opened. SCSS interest rates are payable quarterly and fully taxable. The interest rate of the project is subject to quarterly review and revision.

When putting resources into the plan, the interest rate will remain the same till the scheme matures. Senior citizens can claim a rebate of up to Rs 50,000 in a financial year under the 80TTB section on interest received from SCSS.

Experts, say one should invest in a diverse portfolio. Gold is good for long-term planning but it does not have much benefit as silver is cheap, it is for all sectors of society. Investing in various schemes of the bank protects your money but the income is not high. The investment rule is 'more risk, more return'

Economic analyst Mr. Ladda is not advising his clients to invest in gold as he believes prices will not go up now. The 'top' of gold has come, silver can rise against it. Debt fund, FD, PPF investments in banks are safe.

Invest in your funds, future needs, risk factors, and trends.

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FAQ

Should I invest in gold or bank?

Deciding whether to invest in gold or a bank involves weighing various factors based on individual financial goals and risk tolerance. Gold is often considered a hedge against economic uncertainties, providing stability in times of market volatility. Banks, on the other hand, offer diverse investment options like savings accounts and fixed deposits with varying risk and returns. The choice depends on the investor's preference for stability, liquidity, and potential returns. Diversification may involve a combination of both assets, balancing the safety of a bank with the resilience of gold, aligning with a well-rounded investment strategy.

Which is better to invest in gold or silver?

Deciding between gold and silver as an investment requires considering multiple factors. Gold is often seen as a store of value and a safe-haven asset during economic uncertainties, while silver, with its industrial applications, may see increased demand during economic growth. Gold typically holds a higher value, but silver can offer greater price volatility, potentially leading to higher returns. Investors should assess their risk tolerance, investment horizon, and market conditions before choosing. Diversification by holding both precious metals can provide a balanced approach, combining the stability of gold with the potential for higher gains from silver.

Which bank is good for gold investment?

Choosing the right bank for gold investment requires careful consideration of various factors. Among the top contenders are renowned financial institutions like HDFC Bank, ICICI Bank, and State Bank of India (SBI). HDFC Bank boasts a robust gold loan scheme, offering competitive interest rates and flexible repayment options. ICICI Bank, with its Gold Loan services, provides quick disbursal and transparent terms. SBI, a trusted public sector bank, offers secure gold deposit schemes. Ultimately, the ideal bank for gold investment depends on individual preferences, interest rates, and the convenience of services. Prospective investors should compare offerings to make an informed decision aligned with their financial goals.