Gold is part and parcel of Indian culture- women love to wear gold jewellery and men love to invest in gold for good returns. Irrespective of income levels, every Indian family have gold in one form or other and the quantity depends on their financial strength. Many families invest in Gold for future purposes like children marriage, retirement, etc.
When planning to buy gold for investment purpose one should consider investing in the form of coins & bars instead of jewellery. There are few drawbacks in investing in Jewellery. Jewellery gold attracts wastage and making charges when we buy or sell. Gold coins of 24 Kt does not attract any such charges. Also if you want to cash out gold jewellery it’s a bit tougher compared to gold coins.
So investing in Gold coins is the good option. Lets look at the various sources from where we can buy gold in the physical form (paper gold topic for some other day) and the pros & cons of each source.
Banks – Trusted Sources, Premium Rates
Almost all the banks in India sell gold coins in various weights and shapes. They offer coins weighing from 2 grams to 100 grams bars with 99.99% purity. Banks are the most trusted places to buy pure gold coins as there is almost zero percentage chances for fraud. The weight and purity are 100% accurate. Also banks provide certificates of purity for the gold coins they sell.
On the flip side there are two disadvantages when we choose to buy gold coins from banks. First one is the premium price at which banks sell the gold, which is in general 10% – 15% more than the market rate. Second one is they don’t buy back the gold coins from you. The moment you leave the bank after purchasing gold, it’s impossible to sell the gold back to the banks.
After weighing the options of purity, trust and price if you prefer to buy gold coins from banks, we suggest you to compare gold coin rates across various banks and choose the bank that offers cheapest price. In my personal analysis nationalized and government banks like Andhra Bank, Punjab National Bank, SBI sell coins at cheaper rates compared to ICICI, HDFC, Kotak Mahindra. For easy comparison of gold coin rates check this page.
Jewellery Shops – Cheaper Rates, Verify Purity In Few Shops
Can you name a town in India that does not have a gold jewellery shop? May be it’s a tough thing to do. Gold jewellery shops are the most accessible sources for buying gold coins. They sell the coins in variety of weights as well as shapes. If you are religious, you can buy the coins in the shape of the god you pray. Otherwise you can grab a regular gold coin that is available in the same form as in the banks.
Gold coins and bars offered at Gold shops are a lot cheaper than the Banks. The purity of the gold is as good as a bank if the gold shop is a highly reputed one. But watch out and enquire the details thoroughly before buying gold coins from small shops as they cheat at times. Reputed gold shops provides purity certificate for the gold coins and also they are sold in tamper proof packs.
So if you know a reputed gold jeweller in your area who sells gold coins, then it’s the cheapest source to buy gold coins.
Post Offices – Trusted Sources, Premium Rates
Another trustworthy sources to buy gold coins are Indian Government Post Offices. They sell 24 karat 99% pure gold coins in various denominations varying from 0.5 grams to 8 grams. Across India so far 630 post offices(as I write this post) are offering gold coins to it’s customers. So if you live in a small town where you don’t find a bank that sells gold coins then there are good chances that your area head post selling the gold coins.
Like the banks, the gold coins rates at post office are slightly higher than the gold jewellery shop. To know the price of gold coins at post office, you have to visit the nearest post office personally and ask for the price.
Reputed Institutions – Trusted Sources, Available In Few Cities
Across the major cities of India, institutions like Tanishq sell coins, bars and bricks of 24K & 22K. They give guarantee for the purity of gold and you can buy gold from 1 gram coin to 1 KG brick. Rates vary on the amount of gold you are planning to buy. May be if you want to buy 500 grams or 1 KG gold for any institutional purpose, step into these institutions and ask for a good discount.
Gold Financers – Another Source For Gold Coins
In the past couple of years many institutions started lending loans against gold deposits across India. Major financial players and reputed organisations are getting in to gold loans business. Apart from giving loans against gold, these institutions also sell gold coins and they are a good source to buy gold coins. Few of the finance institutions that sell gold are Manapuram Finance and Muthoot Finance.
So to buy gold coins in India a wide range of sources are available. You can choose the one that fits your need.
cc image credit: flickr/motoyen