Electronic gold receipts let Indian investors own gold digitally while it is stored in Sebi-approved vaults. Here's how it works and how to purchase units online.
Photo credit: Livemint
Indians have long considered gold a safe-haven investment, buying it in the form of jewellery, coins or bars. The yellow metal also holds cultural significance, with families purchasing it during weddings and festivals such as Dhanteras, Diwali and Akshaya Tritiya, as a symbol of good fortune.
However, buying physical gold comes with concerns such as purity, safety and storage. Electronic gold receipts (EGRs) offer an alternative, allowing investors to own gold without having to physically hold it.
The National Stock Exchange of India (NSE) launched EGRs as a new segment in May this year, with an intention to create a more transparent and efficient price discovery of the safe-haven metal.
What are EGRs and how do they work
Electronic gold receipts are digital certificates that show you own a certain amount of physical gold. The gold is safely stored in vaults approved by the Securities and Exchange Board of India (Sebi), while your ownership is held electronically in a demat account.
Investors can buy and sell them through the stock exchange, much like shares, and can also convert their holdings into physical gold. The entire process is designed to make gold trading easier and more transparent.
Benefits of investing EGRs
Since EGRs are traded on stock exchanges and held in demat accounts, investors can buy and sell gold without worrying about its physical storage and security. On its online portal, the NSE has outlined the following benefits:
Comments
0 commentspsst, say something nice 💬