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How Do I Invest in Gold Through SIP?
February 27, 2024
Table of Content
Why Should I Invest in Gold?
Many people prefer to invest in gold instead of stocks or other market instruments. Here’s why gold is a good investment:
- It’s Safe
Gold is known as a hedge against inflation. The metal itself doesn’t lose value over time. Instead, when prices rise, the value of your gold increases as well. - It’s Not Linked to the Market
When the market dips, the price of gold doesn’t always fall. There are times when gold prices rise even when there’s a downturn in the market. Remember, gold prices can occasionally fall. But, these short phases hardly ever last more than a few weeks.
How to Invest Your Money in Gold Digitally
In today’s digital economy, you can invest in gold digitally. Here’s how:
- Gold ETFs
With a gold ETF, you use a demat account to buy gold. The money in the account is considered equivalent to the physical amount of gold. - Gold Funds
Alternatively, you can invest in gold by buying stocks of gold mining companies. Gold funds or gold mutual funds also cover silver, platinum and other precious metals. You invest with the help of a mutual fund manager.
Investing in Gold Through SIP
It isn’t always possible for individuals to purchase large quantities of gold at one go. So, you can use a SIP to invest a fixed amount regularly to buy digital gold. Many people opt for the SIPoption as it does not require a demat account. Additionally, with a SIP, investors can build up their wealth slowly. They do not need to make large purchases outright. By investing small amounts every week or month, investors can build their wealth at a steady pace.
What Are the Advantage of a Gold SIP?
- Understanding how to invest your money can be tricky. Many people assume that they need to save up a significant sum before investing. For many people, saving up large sums takes a lot of time and effort. With a SIP, you do not have to worry about large amounts. Instead, you can start small and invest as per your budget and income.
- Additionally, since a SIP is a periodic investment, the cost of gold starts to average out. Gold prices fluctuate every day. Some months you may buy gold at higher rates than others. In the long run, you could end up purchasing your gold for a reduced rate.
- Finally, with a systematic investment plan, you can set up an auto-debit with your bank. So, you never have to worry about missing a single investment. The money will automatically get routed to your investment avenue of choice.
- Should you choose to invest in gold, the digital route is probably the best way to move forward. You can use a SIP to make periodic investments and build your wealth over time. Remember, your asset value will appreciate over time. When you need to quickly liquidate funds, you can sell your gold with ease. Once you create an investment plan, make sure you stick to it. When you remain invested, you will enjoy high returns.
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Francis Rodrigues
Francis Rodrigues has a decade long experience in the insurance sector, and as SVP, E-Commerce and Digital Marketing, HDFC Life, manages the online sales channel, as well as digital and performance marketing. He has had hands-on experience in setting up sales channels and functional teams from scratch over a career spanning 2 decades.
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We at HDFC Life are committed to offer innovative products and services that enable individuals live a ‘Life of Pride’. For over two decades we have been providing life insurance plans - protection, pension, savings, investment, annuity and health.
The Unit Linked Insurance products do not offer any liquidity during the first five years of the contract. The policyholders will not be able to surrender or withdraw the monies invested in Unit Linked Insurance Products completely or partially till the end of fifth year.
Unit Linked Life Insurance products are different from the traditional insurance products and are subject to the risk factors. The premium paid in Unit Linked Life Insurance policies are subject to investment risks associated with capital markets and the NAVs of the units may go up or down based on the performance of fund and factors influencing the capital market and the insured is responsible for his/her decisions. HDFC Life Insurance Company Limited is only the name of the Insurance Company, The name of the company, name of the contract does not in any way indicate the quality of the contract, its future prospects or returns. Please know the associated risks and the applicable charges, from your Insurance agent or the Intermediary or policy document of the insurer. The various funds offered under this contract are the names of the funds and do not in any way indicate the quality of these plans, their future prospects and returns.
18. Save 46,800 on taxes if the insurance premium amount is Rs.1.5 lakh per annum and you are a Regular Individual, Fall under 30% income tax slab having taxable income less than Rs. 50 lakh and Opt for Old tax regime
**The returns mentioned is the 5-year benchmark return percentage of Nifty Alpha 50 index data as of April 30, 2025, and is not indicative returns of HDFC Life’s Top 300 Alpha 50 fund(SFIN:ULIF07828/02/25Alpha300Fd101) Source: https://www.niftyindices.com/Factsheet/Factsheet_Nifty_Alpha50.pdf
