I have written about investing in gold through gold ETFs, and gold monthly income plans in the past, but there is a more direct way to invest in gold, and that is by buying gold coins. I use the word direct because you buy physical gold, and don’t have to pay fees to the middle-man, thereby eliminating at least one layer in between.
The flip – side is that you will have to store physical gold with you, but most of you would have bank lockers to store jewelery anyway.
Here are a few things you should know about buying gold coins in India:
1. Reputed banks sell gold coins: The most important thing to me is that reputed banks like SBI also sell gold coins, and that reduces the chances of fraud, and someone selling you something which is of less purity than they claim. A lot of banks have entered this space, and they sell gold coins through their branches. Not every branch will sell you gold coins, so you need to go to the bank’s website and find out the closest branch that will do so.
2. Different sizes: Gold coins are available in different sizes, so you can buy the ones that suits your needs the most. The usual sizes are coins of 2, 4, 5, 8, 10, 20 and 50 grams. The coins are 24 carats, and the banks guarantee their purity too.
3. PAN needed if you are buying gold coins worth more than Rs.50,000: If you plan to buy gold coins worth more than Rs.50,000 then the bank will ask you for your PAN details. I don’t think a jeweler will ask for similar documentation, and that might be one reason to go to a jeweler to buy a gold coin.
4. Banks won’t buy – back your gold coin: I have not seen any banks that you can sell your gold coins to. They are happy to sell you their gold coins, but you can’t go to them and sell it back to them. You will have to sell the gold coins to the jeweler, and this is probably another reason for buying gold coins from jewelers in the first place.
5. You might pay a premium for buying gold from a bank: Now, I started off extolling the virtues of buying gold coins from reputed banks, and I will end this post by mentioning that if you compare prices between your local jeweler and some banks – you might find a difference. There will be a difference even when they guarantee the same purity. A lot of people think that this premium is worth it because the price is higher when you go to sell the gold, but that is not always true. You don’t get this premium while selling off your gold coin. In effect, buying gold coins from your jeweler might turn out to be cheaper than buying it from a bank. It is up to you to decide whether the difference in price is worth it to you or not.
These were just some points that you should keep in mind while buying gold coins – I am going to write more about this topic in the future because a lot of people are interested in this, and would love to hear if any of you have had any experience with buying gold coins.
151 thoughts on “How to buy gold coins in India?”
While buying gold coins from GRT Jewellers they charge 3% for BIS HALLMARK for embossing.Is this 3% charge is correct?
Superb piece! I have some coins of India and was looking for stuff like this which guides a new collector like me.
Thanks For posting this Coin
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Is this is a Perfect time to Buy Silver Bars at 38000. And Jwellers asks for Making charges of 3Rs/g. So should i go for it or not?
Thanks for your valuable insights. Now you can get gold coins in online and as the technology improves now you can customize your gold coin. Either you can engrave your name or engrave your face on a gold coin. You can get such new and innovative products at http://www.augrav.com
Thanks for your valuable guidance.
Please help in buying gold coins. Is there any advantage or disadvantage in buying 2 gm coin instead of going for 10 gm??
today i purchase two five grms gold coins – comparing market rate it is Rs.4000/ more – what is the reason please explain me (20/11/2012) today gold rate 24c – 3185 but post office charging after discount without tax 10grms Rs.35341/
Thanks for the info. I am looking at investing in Gold for my retirement fund, so this is useful information to me.
i satish6683 buy a 10 gram gold coin shall i buy it frm a goldsmith or frm a bank?? one bank employ told me that gold smith’s gold coins are 999.4 purity and bank’s are of 999.9 purity.i.e for 24 crt..is it true??
Banks don’t buy back the gold coins that they sell to you and this has been a major problem for people who bought from them because jewelers take a big cut if they buy coins from anywhere else so that’s an important thing to keep in mind. As for purity, I’m not sure, you can ask the jeweler for the same coin that the bank gives and see if they are willing.
i am a very new comer to this field and i need your suggestions to me whether i need to invest in gold or not. i am eager to know if i keep my money in investment how it will be.
I m an MBA (Finance) student. I m planning to do a project on investments and recently there has been an increase in gold investments via etf and mfs and other means, would like to seek ur help as i have been going thrgh this site and its really helping me a lot