When you think about buying gold coins – the first place that comes to your mind is probably the local jeweler, but there are a lot more options than that at your disposal, if you want to buy gold coins.
In this post I am going to look at some of those options.
1. Buy gold coins at the bank: A lot of Indian banks sell gold coins these days. The benefit of buying gold coins from a reputed bank is that you have a lot more peace of mind, as far as the quality of the gold coins go. The disadvantage of buying gold from a bank is that they normally charge a premium on the gold coins, and you might be paying extra than what you would have otherwise paid at a jeweler. Another disadvantage is that normally banks don’t buy back gold from you. If you buy gold from a reputed jeweler, then in most cases they will buy it back from you.
2. Buy gold coins at the post office: This might come as a surprise to some of you, and it certainly surprised me, but it is true that the Indian Post Office sells gold coins. They too charge a premium on the gold coins they sell, but it seems that it is less than that charged by the bank. I am not sure about this though, and it is best to check this point yourself. Like banks, the Post Office will not buy the gold back from you, and only a few post offices are allowed to sell gold coins, so this option might not even be practical for you.
3. Buy gold coins online: I saw at least a couple of websites that were selling gold coins online, and that seemed to be legitimate. I am not linking to them because I couldn’t read any reviews on them, and do not know any one who has bought gold coins online in India. Further, when I checked the price of a 2 gram gold coin on their website and compared it with the gold coins SBI is selling, – I found that the online store is charging a higher price. The online store was asking Rs. 3998 for a 2 gram 99% purity gold coin, whereas the price I saw at SBI was Rs. 3,760. This doesn’t make much sense to me, and personally, I would rather go to a bank and buy gold coins, rather than pay extra to an online retailer to buy gold coins.
4. Buy gold coins from nation wide retailers like Tanishq: You can go to a reputed nation-wide jeweler like Tanishq, and can buy gold coins or bars from them. This offers you peace of mind because they have a strong reputation, and their good distributions means that this will be a convenient option for many of you.
5. Buy gold coins from your local jeweler: Most Indians will have a family jeweler, and if they sell gold coins or bars, then you might just find that this is the cheapest option. Furthermore, they will be willing to buy – back the gold coins as well, so that is an added benefit of buying from them.
These were five options that I could think of where you could buy gold coins in India, and I’d like to hear if there are any options that you know of and I missed out on.
Fine, i view this site because i was in confusion of buying gold, and now after reading all the comments and views now i m more confused, so now i ve come to conclusion that i wil purchase gold coins or bars from nationalised bank.
As per today and till february is concerned i would go for bank of baroda or punjab national bank because they are giving discount of 2%, and during other time its better to purchase from corporation bank, because its price is less when compared wit all other nationalised banks.
Thank you.
All the best with your decision Ninna, just make sure you figure out how you will sell the gold coins because as you would have noticed that is the place most people have faced trouble.
please tell me system of purchase gold from PNB and all terms and condition .
PNB is the best organization to tell you that – you can go to their branch, they will tell you a price of the day, and then you can buy the coin. Just keep in mind that they won’t buy back the gold coin from you so you will have to sell it to a jeweler somewhere and a lot of people have faced problems in that.
Buying gold from the bank,s is never suggested one should always buy gold from some known jeweler and with a view of keeping it for at least 8-10 years.
In kolkata MMTS shops people don,t entertain you but may be in other cities you can directly approach them.
Neha,
The very basic question..
Gold Invest karne k liye sabse jada konsi chiz leni chaiye..
ornaments ya..coins ya ny as such kind of jwellary..
Pls suggest..
Thanks..
Neha, the gold coins are much better than gold jewelery for investing, but keep in mind when you go back to sell your gold coins to the jeweler he will deduct some percentage, so you will have to bear that in mind.
Neha, more educated women buying in investment avenues than going behind jewellery investments. fashion changing very fast. What is good today may not be in fashion tomorrow.
Therefore for longterm investment and guard against inflation, BUY E-GOLD & E-SILVER than physical gold/silver coins or jewellery
Gold Jewellery has become passe, with so many more options in the latest fashion trend.
I just read on the Tanishq website that “When you exchange any Tanishq gold coin with jewelry… a full value exchange is done on the same.”
http://www.tanishq.co.in/tanishq-story/tanishq-22k-gold-coin
but my questions remain
they had made their money by the time on making charges of jewelery and which are huge as compare to other local jwellers.so………… full value exchange is still a compromise.
Does Tanishq deducts extra if the coin has been bought from another vendor. For example, if I buy a coin from MMTC, and sell it to Tanishq, the questions are:-
1. would they buy coin of another vendor at all?
2. if yes, would they deduct the normal 5% or more?
Sorry Goel, but I don’t know the answer to either 1 or 2; maybe someone else who has tried this can answer your question.
Hi All,
as posted by nidhi mahajan…..i have faced the same problem with the
waman hari pethe jwellers at nagpur.
the market rate of gold per 10g is – 20750 and WHP are charging 21750 (almost 1k more)…morever they are also deduction of 10% ….at the time of buying it back…..which not at all the good thing….also the employees are not able to explain me properly the reason for the same.
always make enquiry for the buy back policy……moslty buying from local(but still known) jeweller is good..
Thanks for sharing your experience Manjusha….so the key thing here is to be sure of the buyback policy.
THANX FOR THE INFORMATION
Thank you for reading Divya.
I am still not convinced to your suggesstions. No body is confirming where to buy gold exactly.
please suggest.
Nitesh the content here is mostly geared towards giving you information – pros and cons about a topic, and then letting you take the final decision. What’s best for one person may not be the best for another. So, given that please evaluate the points mentioned here and use your own judgment.
@ Tejas Dave, Manshu
Although i haven’t bought aby gold through this route one of my friend is suggesting me this.
As per my information the best way for you to purchase gold as investment is to invest it as E-Gold. For that matter Buying from E-Gold seems to be best option.
Download daily summary from the following link and there is a clear comparision given between E-Gold , Banks and Tanisq.
http://www.nationalspotexchange.com/SitePages/MarketMaster.htm?pg=7
The procedure would be as follows
1) Open a E-Gold Trading account with the Depository Participants like Karvy
2) Buy E-Gold and Hold it if its for Investment. You can buy as low as 1 Gram
3) Else you can get it delivered in 2 days ( 24K – 995 Purity)
Keep in mind that You spend extra Rs. 500 for opening an account with Karvy so if you are buying gold below 5 grams it doesn’t make sense.
You can check the pricing in their website daily.
I am yet to find a couple of answers about E-Gold
1) As per my information it is delivered in select cities only.
2) what are the charges when i get these Gold Coins exchanged for Ornaments
Anybody knows the answeres for these questions please comment.
I think this way to buy gold is slowly gaining prominence as i have seen a couple of blogs recommending this mode.
http://www.mydigitalfc.com/news/e-gold-may-be-better-buy-569
Sarat,
Thanks for sharing this info and I’ve been hearing about this option recently myself and had to look into it in detail but haven’t been able to.
One of the things that I am really skeptical about is how someone can say this is the “best” way to invest in gold when it hasn’t even been around for a year? Don’t you need to see a certain track record before you put it up on that pedestal?
But again, thanks for bringing up this in the discussion.
re bhai u information hai to kam ki. RAM RAM JI
Thanks a lot for this information.
That is a comment that the local merchants deduct 5% when it is sold back to them. Where should we go if we want to buy it to envest for long period like 10 or 15 years ?
To the local jewller, bank or Tanisque?
Your reply would be very important for me.
The bank will not buy the gold coins back from you Tejas, so that’s one thing to keep in mind. As Nidhi said above Tanishq sells at a slight premium to others, and then deducts a certain amount.
So, I’d say check with Tanishq on what they are offering, and then compare that with a local jeweler of repute to see how they fare. The key thing would be to compare what the local jeweler will deduct for buying it back (if he deducts anything at all), and seeing which one is better.
Does this make sense?
WHOM SO EVER U MAY PLAN TO BUY GOLD FROM, IT IS ADVISABLE TO ASK THE DEDUCTION POLICY FOR BUY BACK. A CUSTOMER LOOSES A LOT OF MONEY HERE ALSO.
Loosing 10% is lot? Hmmm well people should not sell them at all; but at low prices and sell high prices, when price difference is high? why this so difficult
THIS IS REALLY ANNOYING THAT TANISHQ AT ONE HAND IS SELLING GOLD AT A MARKED UP PRICE THAN THE MARKET RATE AND ON THE OTHER HAND DEDUCTING AS GOOD AS 5% WHILE BUYING BACK ITS OWN GOLD……. LOOTOING FROM BOTH ENDS……
I amazed at this posting. Of course this how capitalism works. You buy below market from the willing seller and buy above or at market prices from the willing buyers. I do not see anything wrong other than pure market exists!.
Usual practice in USA is if spot gold price on that day and time is say 1370USD per ounce, then the dealer will sell it with 50 to 75 $ premium. ie. 1370+60= 1430.
while buying back the same coin he will see the spot gold price of the day and give 10$ less to customer. i.e spot price is 1370. then buyer will get 1320$. so we just have to accept the practice. what make sense for buyers is wait for at least 15-20% growth hence this dealer profit is taken care of and ylu still get appreciation. in short term trading gold coin incur losses.
hope it helps
Thanks for sharing that Shilpa.
thanks for ur useful info buddy
You are welcome…glad you found it useful.
Great information. I got a lot of good ideas to save money.
You Could buy from MNC Bullion 99.9% purity Gold coins which are just like the Bank coins at much competitive price. I bought from them and I am happy with the coin and service. They informed me that very soon they would sell it online on their website http://www.buyorsellcoin.com for delivery anywhere in India
As per the above post by Yash, I bought one Silver 100 grams bar from mncbullion.com. I must say that I am impressed with the service and the coin. The premium came about 16%, which is one of the best in the Indian retail physical silver market.
But today I found out about Jalan Jewellers in New Delhi. They have two branches: one in Chandni Chowk and the other in Lajpat Nagar. I went to Lajpat Nagar as their Hallmarking facility is located there. They are BIS approved for Hallmarking. You can check on this link to see their address on the table at BIS web site: Sl No. 6. http://www.bis.org.in/cert/hallmarkass.htm
The premium turned out to be slightly lower than MNC Bullion. Plus I got them to hallmark the bars. It seems MNC is not authorised to hallmark. But if you talk to them they may hallmark it through 3rd party. I am not sure.
So for any one living in Delhi, I highly recommend Jalan Jewellers. Especially the Lajpat Nagar branch as the hallmarking centre is located right there. When you buy tell them you want it hallmarked. I think it is Rs. 50 per item. I once again highly recommend that you check out Jalan Jewellers. They also supply in part to MMTC and Muthoot Finance.
For those who don’t live near Delhi, they can buy from MNC Bullion, who also give great service. But again prices are slightly higher than Jalan Jewellers: about 1%-2% difference. But if you can ask them to hallmark, it would be better.
So, my search for buying physical silver in Delhi finally ends. First choice is Jalan Jewellers: because of price, location, hallmarking. MNC Bullion is also an alternative. Strength of MNC Bullion is that they are reputed in South India and buy & sell online. Both of them are recognized from MCX, and NSEL. However, Jalan Jewellers is also recognized by IBMA.
Great. Thanks for such a detailed information I was seeking for long. Anyone interested in buying Gold/ silver should go through these blogs
It’s great information on this blog. Thank you ..
On further browsing I came across a Government run MMTC that claim to be selling Gold coins and bars however they do not have any outlets/offices in Mumbai. The only other reliable option I was able to figure out was that of National Indian Bullion Refinery. I am still to try it out. If any one has any experience with it that will help me and other readers first hand.
Jai Mata Ji
You can buy the 99.99 purity gold coins, assay certified and distributed by the bank from the local jeweler and you will end up paying approximately Rs 1500 less from the actual price quoted in the bank. The computation goes as the actual market price of the 24 carat gold on that day +Rs 800 +1% tax if brought in Bangalore. If you are buying a 22 carat gold coin, you have to pay the actual market price of the 22 carat gold +die charges which would be approximately Rs 30 per gram or some people would levy Rs 300, depends on your local jeweler.
Say for example if you the bank quoted you Rs 16,500 for an 8 gm coin, you can buy that same coin from the jeweler for Rs 14,200. If you are getting an 8 g, 22 ct coin from the jeweler, you would be paying somewhere around 12,000. These figures are just approximates.
Hope this helps for a better investment
Thanks for the tip Alex. Is it easier to sell coins bought from a jeweler back to them as compared to coins bought in a bank?
Hi,
Am interested to buy gold for investments and recently started exploring the market.
My Findings:
Banks charge a high premium for 24 Carat Gold coins/bar, but whereas my local jeweller has the same bank sealed gold coin of 24 carat on which he is charging 9% premium (as per RBI directives 9% is allowed) +1% ie 10% which i found quite reasonable compared to banks whose preiums are very high .
Buyback would be at the prevailing rate of 24 carat gold on the day of sale.
That means what you pay on Gold coin is the 10% premium rest is the return which you get back on the investment.
Also the Gold ETF about which i have read in this site only if sold after 1 year then Long Term capital Gains LTCG would be applicable which is again 10%
Hence i was trying to compare the two options in which Gold ETF seems better as for the same 10% cost you get the Gold and you dont have to pay the locker fee and storage tension .
You get the benefit of investment in Gold without actual physical possession and tension of safeguarding the same.
Please let me know your Views on the understanding.
Hi Sowmya, these are all good observations, and let me add a few thoughts to them:
1. When you go to sell the gold coin, you might face some additional deduction as reported by people who tried selling Tanishq gold coins, so you need to keep that factor in mind while looking at physical gold.
2. Gold ETFs do have costs which are about 1% of assets for the lower ones, so this is akin to storage charges, and you can think of this money that will be reduced from your profit, or increased to your loss.
3. VAT would have to be paid on buying physical gold.
So, these are some additional factors that you can evaluate.
Hi Sowmya,
I would like to add something to your statement below:
Also the Gold ETF about which i have read in this site only if sold after 1 year then Long Term capital Gains LTCG would be applicable which is again 10%
For Physical Gold, you will have to wait for 3 years (in contrast with 1 year for demat gold) in order for the gain to be taxed as Long Term Capital Gain. The Short term capital gain is added to your income in both the cases.
by telling ‘wait patiently’ iam not meaning 1 or 2 years.if you notice the share market it moves in cycles.1 0r 2 years it may be down.but after that you will get the returns more 3 times also.at 2008 market crash if you have bought gold and taken a loan and invested in equity mutual funds you would have doubled your money and the gold’s value also increased.now you can sell the gold for high rates.and repay the loan.what ever your earned in the mutual fund is bonus.
Hindsight is always 20 – 20 – anyway to each his own – all the best for your plan.
better buy gold coins and take a loan using that from a bank.the maximum interest will be 1.5%pm.invest the same in a liquid mutual fund.when ever share markets fall heavily invest part of the amount.wait patiently.once you get 3%pm return with draw and pay back the loan.
GB – What would you do if the market really tanks, and you can’t make the 3% per month that you are talking about? This is a really risky strategy, and personally, one that doesn’t make any sense to me at all.
I have been researching gold market for three years. I will tell you this which I don’t see any other Indian mentioning. Gold ETFs don’t have the physical gold to back them up. ETFs are derivatives, and they are risky. If you want to participate in the gold bull market, you must buy physical gold, and never buy a piece of crap Gold ETF derivative. NSEL E-Demat is crap too. There is too much counter-party risk to these derivatives. You should buy gold for safety. Exception is if you are trading for short term. But you should not trade in gold for short term. Short term is primarily for losers or beginners. Smart people buy for the long term with the trend. There may come a time in 2,3,4, or 5 years when you may sell your gold. ONLY BUY PHYSICAL GOLD AND SILVER.
That’s not true – gold ETFs are required to hold physical gold to back up their purchase which is audited as well.
What’s the basis for you saying there is no gold to back gold ETF?
That’s absolutely not true. Gold ETFs are 100% backed by Physical Gold in India. I think you are speaking about the US, where there are certain funds that use the derivative way into gold.
Thankfully in India though, it is not allowed. Infact, in India, even the AMCs donot have access to the gold stored in the vault. The gold is insured against any loss. It is routinely verified and audited and is taken care by the custodian of your mutual fund, which is usually a bank. The custodian keeps the gold on behalf of the investors and the amc.
You are right about the gold ETFs in the U.S. using derivatives which shows that the ETFs cannot be trusted.
But the same is indeed true in India. More so. Because people here are blindly trusting the custodian banks.
AMCs need to have access to gold in the vault, which you yourself point is NOT the case. The custodian itself doesn’t have gold because if they did they would release the audit results, which none of the banks have released. It shows that something is fishy with the ETFs. So, never trust them. Only buy physical gold and sivler.
It is not true that Indian Post office is selling gold coins cheaper than banks. Rather, they sell higher at about 5-6 %more. The reason is not clear.
Morever, their rates are not avialable on line to check by a customer.
There is need to to fix limit on the maximum price a bank can charge of gold coin.
At present their is difference of 5-6 % in the prices.
Also, the banks and post office must introduce the buy back scheme of their gold coins, as Tanisque has. This shall enhence the sale and purchase of gold coins.
Govt must think to mint its own gold coin, as USA and other developed countries are doing.
Yes, banks should have buy back schemes to make this investment popular