Article

Procedure: How to Invest in E-Gold
February 06 , 2013
  1. E-gold has several merits over gold ETFs, gold mutual funds and physical gold for investment purpose. To mention some, no recurring expenses are involved. E-gold units can be converted to physical gold and delivery is made at 15 locations in India. Trading volume in e-gold is higher than in gold etfs. Yet it is not without its demerits, especially when it comes to retail investors. It is a new product launched in 2010. 
  2. This may be the best way of gold investment for you if you intend to accumulate gold systematically over a period of time to eventually redeem it for physical gold. If you intend to buy gold purely as an investment product, gold ETFs would do almost as well.
  1. For trading in E-Gold you need to open Client Account which is NSEL's Trading Account and Beneficiary Account which is Demat Account in NSEL. These are different from the trading account and demat account for shares.
  2. On NSEL's website search list of brokers for client account. You can approach one of them to open a client account. Fill up and submit the account opening form accompanied by supporting documents such as address proof and identity proof.
  3. Now you also need a beneficiary account. This can be made with the same broker if he is also a Depository Participant (DP) registered with NSEL. Else you can choose a different DP depending on convenience, service levels and charges. Fill up and submit account opening form along with supporting documents. You can expect to be asked to furnish standard documents like address proof, PAN card, signed photograph and MICR cheque of the bank account provided.
  1. E-gold units are bought and sold like shares. Each unit corresponds to 1 gram of gold. After you log in with your trading account you can buy the number of units you choose from sellers on any day from Monday to Friday between 10.00 am and 11.30 pm.
  2. Settlement of order takes place after two market days. This means units will show up in your account after two days.

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