Which is better gold ETF and sovereign gold bond? Know here!

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Gold has always been a favourite investment option among people, acting as a hedge against inflation. Its demand has remained constant, even during a pandemic like COVID-19, where people were rapidly investing in gold. Sovereign gold bonds and gold exchange-traded funds (ETFs) are popular investment options in gold. Both give good returns, but which scheme will be more beneficial for you? Let us know in today's story.

When is Gold ETF Best?

If you want to invest in gold for the short term, then Gold ETF can be a better option for you. Investors have the facility to withdraw money as per their choice. You can buy and sell it as per your wish. Compared to physical gold i.e. gold jewellery, there are lower charges for purchasing gold ETFs. Additionally, it guarantees 100% purity. Additionally, you have the option of investing in gold ETFs through SIP (Systematic Investment Plan). Gold ETF can also be used as security for taking loans.

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Sovereign Gold Bond Best for Long Term:

Market experts suggest that Sovereign Gold Bond is a better option for medium and long term investors. Although it has a lock-in period of 8 years, which means you cannot withdraw the money before that period, after the lock-in period, investors get a guaranteed return of 2.5% along with income tax benefits. Sovereign gold bonds can be purchased in rupees, and the value is denominated in different grams of gold. The minimum investment in the bond is 1 gram, and there is an upper limit (cap) of 4 kg per person. The thing to note is that this scheme has been started by the Government of India.

Both gold ETFs and sovereign gold bonds cater to different investment needs, and choosing between them depends on your investment horizon and financial goals.