Gold is an important entity, not just in India but in the entire world. The precious metals like gold and silver, rule the investment portfolio as well as the economic market. Here, let us find out more about e-Gold.
What is e-Gold?
National Spot Exchange Limited introduced e-Gold in India in April 2010. e-Gold is a new type of gold investment. Investors can hold the e-Gold in the form of electronic form and Demat. The investment in e-Gold can be done in small denominations by the investors.
Gold units in Demat are e-Gold. In the case of e-Gold, one unit of e-Gold is equivalent to one gram of gold. Hence, you can buy as small as one gram of e-Gold. e-Gold can also be converted to physical units. If you have an internet connection at home, you do not need to step out of the house to buy and sell gold.
However, you should always check the gold price in India today and also 8-gram gold prices in India before investing in gold since you may get an idea about your virtual investments as compared to physical gold.
e-Gold Account Opening
- To buy or trade-in e-Gold, you should have a Demat account.
- This Demat account should be different from the one used for your stock exchange or another trading. This is not allowed by National Spot Exchange Limited (NSEL). You should open a new Demat account only for e-Gold
- This Demat account can be opened with the help of brokers or financial intermediaries.
- The financial intermediaries are supposed to be approved by the NSEL. A list of authorized intermediaries is provided on the link https://nsdl.co.in/dps-nsel.php
- To buy e-Gold you should open a beneficiary account which is similar to starting a Demat account for stocks.
- The most important documents required to open an e-Gold Account include – identity certificate and proof of residence, pan card, photos, and MICR cheque copy among other documents.
How to Buy e-Gold In India
You can buy e-Gold when your beneficiary account with National Spot Exchange Limited is ready. NSEL is an online trading platform running pan India to buy or sell e-Gold units in the country.
You can buy as little as one gram gold as e-Gold. The trading window is between 10 AM to 11:30 PM. It is a good idea to check the gold prices in India today before investing in e-Gold.
Merits of Buying e-Gold
Here are a few things to remember about buying e-Gold in India:
- Flexibility: The ability to buy and sell e-Gold online makes it very flexible and attractive. When you buy an e-Gold unit online, after checking the e-Gold price and 8 gram gold price, the exchange buys one gram of physical gold and keeps it in the vault. In this way, though you are investing virtually in the precious metal Gold, you are also actually buying gold at its current price.
- Purity: The e-gold that you buy online is 99.5% pure.
- Buying Order: You can buy as little as one gram of e-Gold and then continue in multiples of one gram. You can continue the same till you reach 10,000 units of e-Gold. The maximum limit on the account to buy e-Gold is 10,000 e-Gold units.
- Trading: The e-Gold units that you buy are reflected in your account in 2 days. When you sell the e-Gold units, it takes 2 days to reflect the cash received in your account. You cannot short sell in the case of e-Gold units. However, before trading in e-Gold always check the gold prices in India today.
- Easy: It is easy to deal with e-Gold since it is easy to buy and sell e-Gold. You can also buy e-Gold first and then convert or exchange it for jewelry.
- Storage Safety: It is easy to store e-Gold since you do not need to worry about hiding your gold from the world.
Demerits of e-Gold
Listed below are a few demerits of investing in or buying e-Gold:
- The purity of gold in case of e-Gold is 99.50%. However, when you buy gold coins or gold bars as an investment from gold sellers in the market, you get 99.99% gold.
- When you try to convert your e-Gold into gold ornaments, the design charges and making charges are to be borne by you.
- For exchanging gold in the concept of e-Gold, you have to deal with authorized dealers who are a part of NSEL. Not all the jewelers are a part of or enrolled in the National Spot Exchange Limited.
All these factors about e-Gold suggest that it is a good option to invest in e-Gold in India. It is one of the easiest options to build your investment portfolio. Though, you should always consult a financial expert to help you build your investment portfolio for sound advice.
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