Shop for gold at price of a candy on Akshaya Tritiya

People buy the precious metal online at cheaper rates for the festival.

It is again that time of the year, when your parents will ask you to buy gold. Akshaya Tritiya, considered an auspicious day to buy gold, pulls millions of Indians every year to jewellery stores across the country.

On the eve of Akshaya Tritiya, a woman tries a jewellery set at a store in Kalbhadevi on Tuesday. (Anshuman Poyrekar/HT Photo)

But a reality check on gold prices is important before you decide to buy it. Though gold prices have surged in the past one year, the returns have been extremely low in the last few years.

In fact, gold has given a negative return in the last five-year period. According to Bloomberg data, MCX gold has given a return of 3.74% for three years.

Had you left the money in your saving account, you would have got a similar return. Meanwhile, five years returns stood at -0.37%.

Despite dismal returns, if you still want to buy gold just because it is auspicious to buy on Akshaya Tritiya, there are ways to buy it for as low as a cost of a candy.

“We primarily were into business-to-business space. This was one of the steps to move into business to consumers. We started with Paytm last year,” said Vibha Sarin Prabhakar, chief operating officer-retail operations, MMTC-PAMP India Pvt. Ltd, who has sold about 500 kg gold digitally in the last one year.

“After we got a positive response, we moved to other partner. In future we will do more partnerships to increase marketshare. We would look to continue with similar e-wallet companies,” she said.

BUYING GOLD FROM DIGITAL PLATFORMS? HERE’S WHAT YOU SHOULD KNOW

You can buy and sell gold online

FROM WHERE?

Motilal Oswal, Paytm and PhonePe have partnered with MMTC-PAMP, which offers 24K gold with 99.9% purity

PhonePe has also partnered with SafeGold which offer 24K gold with purity of 99.5%

The fintech companies and brokerage firms are only platforms to sell and buy gold. You can leave the gold in the MMTC-PAMP vault for 5 years without any extra cost. When you want to redeem, you can either sell it on the platform and get the money or redeem it in physical form—gold or coins.

THE PURCHASE

You can buy gold unit as low as 0.1gm

To buy, you can use netbanking, credit card, debit card and UPI

According to the rules, you have to do a KYC to buy gold above Rs50,000 and provide PAN if the purchase crosses Rs2 lakh

When you buy gold from these platforms it will be held in MMTC-PAMP vault

THE COSTS

When you buy gold on these platfroms, there is no extra cost other than the price of gold and 3% of goods and services tax (GST)

The buy and sell price of gold is always different. Buy price is always higher. However, when you redeem it in the form of physical gold, you have to pay making charges, transaction cost and delivery charges

According to Paytm’s website, making charges for 1 gram of physical gold is Rs374, for 2gm it is Rs404 and Rs708 for 10gm

REMEMBER

Financial planners suggest you should look to invest in gold only if you want to diversify your portfolio

Experts recommend an exposure of 5-10% in gold. Hence, if you are not planning for gold, first evaluate your asset allocation and then invest.