Gold ETFs are better than the direct gold | How will ETFs work? | How to buy ETFs?

July 3rd, 2010| How To.

Gold ETFs are better than the direct gold | How will ETFs work? | How to buy ETFs?

There is no need to buy the gold directly and buy some lockers to keep them safe. There is no need to buy the gold so that we need some lockers, we should keep them safe from thieves etc. we can also buy the gold in the form of gold exchange traded funds (ETF). We can buy these trades to the maximum every week or every month. We can ask the broker to buy them every Friday in the week or on 5th or on 10th every month. By buying them in this way, we can know the ups and downs in the rate of gold.

If you think to do the marriage of your daughter at 22 years, you can buy the gold ETF every month and at last by the age of 22, you will have 150g of gold. You can buy them according to your capability.

How will ETFs work?

The working and maintenance of gold ETFs are different and these will be traded in stock exchange. So we should buy or sell them through brokers. Each ETF is equal to one gram of gold and half gram gold shares will be considered according to the market value.

The investment is less:

The expenses and investments are also less in the gold ETFs. There will be making charges while buying and other charges while selling. There won’t be any such charges in the gold ETFs.

Two accounts:

Two accounts are compulsory for the gold ETFs, one is trade account and another is demat account. To maintain the profit and loss in the gold ETFs we should have the trade account and we should open this account near broker. The demat account is used to store the units which are bought through electronic devices. This account can be opened from the users or depositor participants. To open this account, we should have the pan, bank savings account, identity proof and address proof.

How to buy ETFs?

We should buy the gold ETFs through brokers by calling them and ask them to buy. We can buy them through online brokers also and the units will stored in our demat account. It is enough to order the broker to buy on the particular day.

Which funds are providing?

UTI, bench mark, quantum, reliance, kotak etc mutual funds companies are providing the gold ETFs.

If we want to buy gold:

The buying and selling of the gold ETFs depend on the NAV. We can buy the ornaments whenever we want just by leaving the ETFs. The maintenance of the gold ETFs is simple and less, so we can buy the gold according to the market rates.