Investment Tips: FD or Gold Purchase Scheme, know where to invest for the more profitable deal..


India is a country where people consider buying gold as the safest investment. If anyone invests the most in this, it is the people from rural areas or those with low income. There are many options to invest such as mutual funds, gold, fixed deposits, savings accounts, etc.


This question often comes into the minds of the public whether they should go for gold purchase schemes or choose the FD option to invest. In such a situation, let us explain to you.

Recently, people have started buying more gold to invest in their savings. To invest in gold purchase schemes, it is very important to first understand and investigate their intricacies.

Fixed Deposit (FD)
Fixed Deposit (FD) is an investment option that guarantees a fixed interest rate after maturity. The public can open it in any private or government bank or NBFC.

People can get their FDs done with banks, financial institutions, and corporations that offer the option of different interest rates and tenures. These are low-risk and reliable interests that provide an assured amount along with interest on maturity, especially for senior citizens as they get higher interest rates, helping them meet their expenses.
FD returns depend on the time of deposit or rather the tenure. Let us tell you that while the interest rate on a savings account is 4%, the prevailing interest rates are higher than this i.e. 5% to 7%.
Interest on FD is taxable, people have to pay tax on an accrual basis under the heading ‘Income from other sources’.
Gold Purchase Scheme
Gold Purchase Scheme i.e. GPS allows people to buy gold in the future by depositing money every month. Currently, nobody is regulating it, hence, the returns on maturity vary across popular jewelery houses that run such schemes.

Any fluctuations in the rate can be managed at the time of purchase on maturity. If we understand by example, if the rate of gold at the beginning of GPS is Rs 5,500 per gram and on maturity, it is Rs 6,000 per gram, then the investor can buy it at the initial rate of Rs 5,500. With this, the investor can keep more gold at a fixed rate.


No tax to be paid
Since GPS is an asset-purchase investment and payment is not made in cash, it is not taxable. Whereas jewelery needs to be reported in Schedule AL (if total income is more than Rs 50 lakh).
Investors also get extra benefits as charges on jewelery are waived off or discounted. One month's installment is also given.
No matter how low or high the gold rate is, gold is bought in India at every festival, wedding, and happy occasion.

PC Social media

From around the web