I received some emails from readers of Finance Synergy asking how to buy gold coins in India. Few friends of mine were also asking this question. So thought of writing this article for everyone’s benefit.

Off course you can invest in gold through gold ETF but in this post, we are going to discuss about the direct way of investing in gold that is the gold in physical form. If you prefer buying gold in physical form over ETF, you will save the charges paid to mutual fund/ETF company for their fund management expenses. However, you will need to have proper safe storage/bank locker for the physical gold.

So for your question how to buy gold coins in India, the answer is: you can buy gold coins directly from reputed banks or from your trusted jeweller. Banks like State Bank of India also sell gold coins and you can directly buy from them. This will obviously reduce the chances of fraud. Buying from a local jewellery shop may be somewhat risky.

Few Points to Consider Before You Go to Buy Gold Coins in India

If you are going to buy gold coins from a bank, please be informed that not all branches of the bank sell gold coins. For example, if you want to purchase it from SBI, you first need to check: which is the nearest branch that sells gold coins.

Keep your PAN Card handy if you are planning to buy gold coins for Rs 50,000 or more. Bank will ask you to show the PAN card and probably you may need to submit a photocopy of the same. However, your jeweller won’t be bothered about you PAN card.

There are different sizes available for the gold coin. Usually they are 2, 4, 5, 8, 10, 20 and 50 gram coins.

The price of gold coins sold by the bank will be higher than that sold by the jeweller, even if they are of same purity. Banks guarantee the purity and hence they charge a premium for that! However, at the time of re-selling it, you have to go to the jeweller only (Banks don’t buy back) and at that time, the jeweller will buy back as per his rates.

Summary: While comparing the prices, always compare same purity level. That is, don’t compare 24 carats gold from bank with 22 carats from the jeweller! Having said that, if you trust your jeweller then you can buy your gold coins from him otherwise you should not take chance and go to a reputed bank. At the same time, be ready to pay for the premium.