Is Buying Gold Coins A Good Way To Invest In Gold?

Gold coin is a relatively safe investment, giving you comfort and assurance. Read on to know the benefits of gold coin investment in detail at IIFL finance.

26 Aug,2022 10:04 IST 1837
Is Buying Gold Coins A Good Way To Invest In Gold?

Gold, which represents wealth, prosperity, and luck, is a popular metal in India. It is crucial for Indian weddings and renowned festivals like Diwali, Laxmi Pooja, and Dussehra. Aside from its eye-catching ornaments, this precious metal is also valued for its savings and good return on investment.

In addition to gold jewellery, you can invest in gold by purchasing gold coins. These coins are available at different purity levels, weights, and sizes.

How Is Buying Gold Coins A Good Investment?

The gold coin is a popular investment choice and has ensured good returns. In contrast to other options, gold as a investment is a relatively low-risk profile, implying you can keep your money safe.

Furthermore, due to the availability of various loans against gold, people have begun considering buying gold coins as a way to save money. Not only is it a low-risk investment option, but it is also safer, making it an appealing option for investors.

Important Things One Should Check Before Purchasing Gold Coins

1. Purity Of Gold

To get the best value for your money, you should check the purity of gold coins before buying them.

The most popular way to measure gold purity is with Karats. The 24 Karat form of gold contains 24 parts of gold and is the purest and most expensive form of gold. Similarly, 22 Karat gold is composed of 22 parts gold and two parts silver or zinc. A combination of gold and other alloys makes gold more durable for jewellery making.

Another way to measure gold purity is by its fineness. Gold coin fineness refers to the amount of pure gold in proportion to the total weight of the coin. Sometimes, even pure gold may contain minimal impurities that the manufacturer fails to remove. Thus, 24 Karat gold has a purity of 99.9%, whereas 22 Karat gold has a purity of 91.66%.

2. BIS certification/Hallmark

Hallmarks or trademarks are purity certificates for gold coins and gold articles that comply with Indian Standard specifications. The purity and fineness of gold items are tested and certified at official BIS (Bureau of Indian Standard) Hallmarking Centers to ensure their authenticity.

The quality test for certifying gold coins is performed meticulously, which saves you time and effort when trying to authenticate the gold coins. Therefore, check for the gold hallmark whenever you purchase a gold coin. Buying gold that is not accredited by BIS (Bureau of Indian Standard) may not be a good investment.

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3. Denomination or Weight

Jewellers and banks generally sell gold coins in various denominations, the most common being 1 gram, 5 grams, and 10 grams. Depending on the size and trend of the market, other denominations are also available between 0.5 grams and 50 grams.

4. Making Charges

While making gold jewellery and coins, the manufacturer applies a charge for their creativity and effort. This service is an unavoidable but expensive fee, ranging from 8% to 16% on jewellery.

Gold coins have lower making charges than other ornaments and gold jewellery because manufacturing gold coins requires relatively little effort and craftsmanship. As a result, gold coins are more accessible and affordable, making them an attractive investment.

5. Ease Of Selling Gold Coins

According to RBI directives, banks will not buy back the gold coins you purchase. It is also important to keep in mind that if you purchase gold coins or jewellery from one jeweller and sell them to another jeweller, your resale value will be lower. Therefore, you need to invest in gold coins via a method that gives you the maximum resale value.

Take Advantage Of IIFL Finance Gold Loan

Want to finance your next foreign trip, a new car, or your child’s higher education? Pledge your gold with IIFL Finance and get a gold loan at the lowest interest rates! Until you decide to pay the entire amount of your gold loan, your collateralized physical gold is kept safe at IIFL.

You get the best gold loan benefits from IIFL Finance, the best gold loan company!

Frequently Asked Questions

Q1. Which is better—gold coins or gold jewellery?
Ans. Compared to jewellery, gold coins are a better investment. With coins, you can purchase gold in the purest form possible with lower making charges compared to ornaments such as earrings and rings.

Q2. Are there any making charges for gold coins?
Ans. While gold coins do have making charges, these are generally lower than gold jewellery.

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Disclaimer: The information contained in this post is for general information purposes only. IIFL Finance Limited (including its associates and affiliates) ("the Company") assumes no liability or responsibility for any errors or omissions in the contents of this post and under no circumstances shall the Company be liable for any damage, loss, injury or disappointment etc. suffered by any reader. All information in this post is provided "as is", with no guarantee of completeness, accuracy, timeliness or of the results etc. obtained from the use of this information, and without warranty of any kind, express or implied, including, but not limited to warranties of performance, merchantability and fitness for a particular purpose. Given the changing nature of laws, rules and regulations, there may be delays, omissions or inaccuracies in the information contained in this post. The information on this post is provided with the understanding that the Company is not herein engaged in rendering legal, accounting, tax, or other professional advice and services. As such, it should not be used as a substitute for consultation with professional accounting, tax, legal or other competent advisers. This post may contain views and opinions which are those of the authors and do not necessarily reflect the official policy or position of any other agency or organization. This post may also contain links to external websites that are not provided or maintained by or in any way affiliated with the Company and the Company does not guarantee the accuracy, relevance, timeliness, or completeness of any information on these external websites. Any/ all (Gold/ Personal/ Business) loan product specifications and information that maybe stated in this post are subject to change from time to time, readers are advised to reach out to the Company for current specifications of the said (Gold/ Personal/ Business) loan.

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