Gold SIPs With No Lock-in Period Is Catching Up Fast

To make investment in gold more flexible, gold SIPs have come into existence

Updated on: 25 October 2019 7:16 pm

As gold has always been a safe haven for investment, Indians’ love for the yellow metal is immortal. To make investment in gold more flexible, gold SIPs have come into existence. Sachin Kothari, Director, Augmont explained to Aparajita Gupta in an interview how people can invest in gold SIPs to yield better returns.

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How advisable is it to invest in gold?

A reasonable exposure to gold investments is suggested to every investor. We believe investors should not have 100 per cent investment in equity. A simple formula to know how much investment one should have in gold is the percentage equal to one's age is the exposure one should have in gold. For example a 30-year-old guy must invest 30 per cent of his total investments in gold. Gold is always a safe haven and one of the best investment options for everyone who is saving or investing for medium to long term.

So having a good amount of investment in gold is highly recommended. Also when the equity market falls the price of gold shoots upward thus proving to be your savior. You balance your equity losses with increased gold price. The price of gold is usually either rising or stable with a very low downside.

How is gold SIP different from other MF SIPs?

One of the major differences between Augmont Gold SIP and MF SIPs is the lock-in period. In Augmont Gold SIP there is no lock-in period. Investors have the flexibility of starting, stopping and restarting their SIP plan as per their convenience. This can be as low as one month. However, in MF SIPs the lock-in period is fixed to one year minimum. If you stop before a year there are charges applied, which is not the case with Augmont Gold SIP. Secondly, Augmont Gold SIP has 100 per cent exposure to pure gold products (coins and bars) while MF SIPs or Gold MF SIPs do not have complete exposure to gold products.

With Augmont Gold SIP investors can convert Digi-Gold in physical coins and bars and request the same for home delivery, which is not possible whatsoever in MF SIPs and customers can gift gold using Augmont gold Digi-Gift option. Investors can use the partial or entire accumulated gold for gifting.

With respect to the documents and procedures to start SIPs, in Augmont Gold SIP you do not need a Demat account nor do you need to have a KYC the procedure is hassle-free compared to that of MF SIPs where you need to have a Demat Account.

What is the average tenure of Gold SIP?

Although there is no minimum tenure for Augmont Gold SIP we have seen investors on an average opting for two-three year tenure.

What are flexi plan and fixed plan in gold SIP?

In the Flexi Plan, investors can stop and restart their SIP plan as per their convenience. While in Fixed Plan customers need to fix the tenure at the start of the SIP. However, there is no lock-in period in either of the plans and customers are free to stop both the SIPs as and when they want.

Who are your competitors in India?

Augmont is among the first players to start the Digi-Gold product way back in 2012. Apart from Augmont, MMTC-PAMP is the only bullion player who sells Digi-Gold product.