10 Rules for Silver Investment in India

10 Rules for Silver Investment in India

As per the World Silver Survey 2018 published by The Silver Institute and Thomson Reuters: India has jumped to 12th position (from 14th last year) among the Top 20 Silver Producing Countries. India’s contribution in the silver market has increased to 16.9 million ounces as compared to 14Moz in 2016. And, India continues to be one of the greatest markets for precious metals like silver and gold. We are one of the biggest contributors of silver in Asia, and any changes in the demand pattern influence the price of silver in the international markets.

If you find it difficult to put money on a full ounce of metals like gold, you can for a much affordable and reliable precious metal like silver. Today Silver rate in India makes it affordable options to invest money in silver bullions and ornaments. Apart from investment, silver is widely used in industrial applications like solar panels, computers, mobile phones, and so on. It has not been replaced by any other metal so far.

But gold, on the other hand, is for wealth accumulation. It is mostly found in the bank lockers or is safely stored in the world’s central bank.

If you are also planning to invest money in Silver, you can compare the rates from different suppliers and choose the best available option. Make sure that you check the silver price in major cities so that you will get some fair idea about its current price in the market. You can also get in touch with your financial advisor to know about more options suited for your investment plan.

For both the urban and rural population, it is a good investment asset and here are the 10 thumb rules before you plan to invest your money in silver -

1. Choose Silver Coins for Small Investments

If you are planning to invest only a few thousand rupees into silver, you can consider buying coins instead of other forms.

·         It is very easy to get them and you can even store them easily at home. However, you will be paying a slightly higher rate than silver bars as coins usually have some form of art or images and the labor charges and this is added to the final price.

·         On the other hand, it also has advantages in the sense that you can buy silver with very less money. It is a good option for salaried individuals and business people who want to save money on regular basis.

·         You can accumulate some coins every month according to your capacity and it is also possible to sell them at a later stage when you want to liquidate your investments.

·         Yet another advantage of buying silver coins is their availability with banks. And it is also possible to buy them from reputed jewelers in your neighborhood. You will even get a certificate about its purity and this will be useful when you have to sell them back into the market.

·         You need to remember that banks will only sell silver coins and will not buy them back at a later stage. You will have to approach jewelers to sell your silver coins if it is needed in future.

2. Choose Silver Bars for Huge Investments

You can invest bulk money on such silver bars and easily save money for your future. As the silver bars have good demand in the market, you will not have any problems when you want to sell them at a later stage.

·         Look for the best deals in the market from the reputed suppliers and you can select silver bars instead of coins.

·         You may not get them through banks as they are bulky and banks prefer to sell only packaged coins that are certified from reputed sources.

·         However, you can approach jewelers who will conduct tests on such silver bars and get them tested for their purity before buying them from the market.

3. Make Good Use of Online Commodity Market

If you are not the kind of person who will invest in physical silver, you can still invest in silver through the commodity market. The investment needed will be slightly higher as compared to regular silver and you will have to pay a certain percentage of the entire value of the contract.

·         Make sure that you have sufficient funds to pay for additional requirements due to fluctuations in silver price in the international market.

·         You can easily sell the contracts at a later stage before expiry whenever you are getting decent profits.

·         This is slightly speculative in nature and cannot be considered as a pure form of investment. However, you will be able to leverage your position when you invest wisely in the commodity market.

·         Make sure that you watch the price movements carefully as they will be different from the actual physical price of silver. You can also check the silver prices across the major hubs to get a comparison about price fluctuations in the market.

4. Always Buy From Reputed Suppliers

Even though you can buy silver coins and bars from any source, it is always a good idea to buy them from trusted sources. When it comes to coins, you can easily buy certified coins from banks even though they charge some extra premium.

·         On the other hand, when it comes to bars, you have to approach local jewelers and get the bars tested from reputed sources for purity.

·         In this way, you can be sure that they are pure and you will be able to get the best value for your money in future.

·         Never buy them from unknown traders in the market as you will have difficulty in ascertaining the purity of the bars on your own and there are chances that you may get cheated in such deals.

5. Secure Them Safely with Bank Lockers

Many people make the mistake of keeping the silver bars at home and this will become a huge burden when you have a large quantity of them. You should never compromise on the safety factor and always choose bank lockers to safeguard your silver investment.

·         It costs very less to take bank lockers and you will be completely relieved that your silver is safe in their custody.

·         As you have ready access to your silver at any point in time, you need not worry about anything and easily choose this option.

·         If you store them at home, there is a chance of theft or burglary and you may lose your entire investment. Even otherwise, you are sure to lose your peace of mind when you have a large quantity of precious metal at home due to security reasons.

6. Track Prices from Different Sources

Silver rates keep fluctuating on a daily basis. For this reason, you should always check silver prices prevailing in your city so that you will be able to get them at the best price in the market.

·         This is especially needed when you are buying silver bars from local traders as you will be able to get the best deal when you have a thorough idea about the current market rate of the metal.

·         There are many apps and other sources that will provide complete up to date information about the latest silver price in the market and you can use them on your mobile phone to get the exact details.

·         This will be handy during your purchase and you can expect to save some money during the transaction.

·         This is true even when you are selling silver and you will be able to get a good price for your investment.

7. Try Not to Buy Everything in One Go

You can never predict the future price of any commodity and you should always buy them in installments so that you will be able to get the average price over a period of time.

8. Do not hesitate to Sell When Prices Are High

Just because you have chosen it as a long-term investment does not mean that you should hold them for the entire duration.

·         Be practical and sell it off when you are getting good prices against it. Remember that you can always buy them back at a later stage when the prices fall down. This implies that you will keep making money due to the price fluctuation/variation in the market.

·         For this purpose, you need to compare the silver prices in different regions of the country and this will give you a fair idea about where you can get the best deal in the market.

9. Always Have Reserve Cash for Good Deals

If you plan to invest few lakhs into this commodity, make sure that you have at least 20 percent cash reserves for emergency deals. And you can use these reserves to get good returns on investments at a later stage.

10. Keep Track of Global Financial Markets

Always remember that global financial markets impact the price of silver in India. Depending on the market you will see a rise or downfall in other global markets as well. And this has a direct influence on the pricing of silver.

You need to be aware of such movements in the market and plan your investments accordingly.

Over to you!

You can follow the above mentioned guidelines to get some profit out of this commodity in the long run. You can also consult a reputed financial advisor when you plan to invest in silver for many years. They can explain the entire pros and cons of your investment plan and guide you to choose the right options suited for your risk profile. In this way, making good money out of your investment becomes an easy task and you will be happy to invest money in such commodities in the future.

 

Happy Investing

Rules for Silver investment in India

Rules for Silver investment in India

Ever since civilization started, it is known that Man has learned how to invest his hard earned money to get some interest in return. Many Investment plans are available nowadays where you can save your money on a long-term basis in the capital market and get a huge profit. Central and State Government issue long-term bonds like a Gold bond, Railway bonds, National Savings certificates etc where people can get a compounded interest on their savings. Investment in Government securities can allow you to enjoy tax rebates. You can also go for buying at a point and reselling when you see the price hikes.

Investment in precious metals like Gold and Silver is considered to be a wise decision in the financial market. If you are a small investor and you have a low capital for investment then instead of going for Gold bonds, you can go for Silver investment. You need to go through the rules and regulations, take advice from the finance experts, observe the market situations and then go for any kind of investment. There are certain points you need to consider before Silver investment.

Things you need to consider before Silver investment

• Initial investment should be small: At the initial stage, you might not have any experience about the investment, its risk, and its returns. So at the beginning take small steps. Go for pure Silver bars and coins in smaller quantities. You have to pay a less premium over the actual metal value. One should keep in mind that you should never go for the decorative Silver coins or jewelry for your investment. These items carry a large premium and their value degrades during resale. After gaining experience and building a strong connection in the market, you can opt for larger purchases and invest.

• Always take advice from the financial Expert: Take the assistance of a broker or an advisor rather running solo. These financial experts can guide you better about the market and when and where to invest.

• Go for bank lockers: You should consider the safety factor and safeguard your silver investment. Choose a bank and take a bank locker to keep your silver investments. Your investment will be under the bank’s custody and you can have a peaceful sleep at your home.

• Maintain an inventory: If you are not going for the bank locker then make sure you have a safe place to store your silver investment at your home. In an emergency, you can have access to them. You should not disclose about it to anybody.

• Online commodity market: If you don’t think it’s safe to store physical Silver at your home then you can go for the option like investing silver in the commodity market. You have to open an account with a reliable broker, buy silver contracts online and then sell when you see a profit before the expiry date.

• Buy from a reputed supplier: It is always advised to buy silver from a reputed source where you are assured to get a pure metal. By doing so you can get the best value for the money you have invested and you will not regret your decision.

• Research more about the current price of silver: Before investment and resale, carry out a proper research about the current price of silver in the market. Take the help of the experts, apps and go through different websites for the price analysis. This step is a must for every investor to follow. You will not suffer from a loss in your transactions by doing so.

• Don’t be greedy: When you think of investments, you might have planned to invest for a certain time period. But when you see a price hike in between that period then never hesitate to sell. Selling will prove to be a wise decision.

• Maintain a cash reserve: Don't invest all your money in one investment at a time. For emergency keep some amount of money. Silver and Gold are the international commodities, their value fluctuates according to the global market. Suddenly it can rise or fall. If the price falls, you can get a chance to buy more quantity. Thus, for this, you need to preserve some cash.

Before investing in silver, there are a certain types of questions that will come to every investor’s mind. Below is a quick guide to help you answer such questions.

How can people invest in silver in India?

Nowadays, people get options to invest in silver just as you used to do in equities. There are various forms of investment for silver. Some of the investment varieties are as written below.

• Jewellery – Silver jewellery gives you an advantage of owning silver in the form of jewellery or any kind of pure possession. You should be able to invest theses assets in the future.

• National spot exchange limited – NSEL gives its buyer the opportunity to trade in e-gold or e-silver. This investment attracts tax incidence in case of gain. Commodity – Many of the commodities can be traded in India. Silver is one of the commodities you can potentially take position by trading in future.

• Silver ETFs from trading accounts – Enables users to buy and sell selected securities from your trading account. The return you are going to get is more than what you would expect from any other investments nowadays.

 

Happy Investing

Which Is Better - Gold Investment Or Silver Investment

 Which Is Better - Gold Investment Or Silver Investment

If you are planning to invest in precious metals in India, gold and silver are the two obvious choices. But apart from the prices, what are the other significant differences between the two that an investor should know about? Read this post to know more.

Precious metals add much diversification to the portfolio and is also an excellent hedge against inflation. While gold is often the go-to precious metal in India, silver investing is also gaining popularity. However, if you are planning to invest in precious metals, which one should you select between the two? Let us have a look at some crucial points that can help you make the decision.

1. Price Volatility of Gold and Silver

While you might know that gold is significantly more expensive than silver; what you might not know is that the price of silver is also more volatile. Lower cost of silver means that it takes a comparatively lower amount of money to create a significant impact on silver prices. You can check the price of silver contracts on commodity markets like Multi Commodity Exchange (MCX) in India for a few days to know how volatile the price of silver can be. In gold versus silver comparison, the price of gold is not as volatile. This makes gold an ideal investment, even for shorter investment tenures.

2. Storage and Safe-Keeping

As compared to gold, silver is a less dense metal. As a matter of fact, if you are buying pure silver, its volume is around 80% more than that of gold. This means that investing in physical silver will also require you to have more storage space. Most people investing in gold and silver in India prefer storing them in bank lockers. If you are going with silver, you will need more locker space as compared to gold, which means higher locker charges.

3. Tackling Financial Emergencies

If you are creating an investment portfolio, there should at least be a few assets that could be sold instantly to tackle financial emergencies. Precious metals are an excellent example of such quick-selling assets. Gold is a better option for bigger expenses, such as purchasing a car or down payment of a new home. Silver, on the other hand, is excellent for smaller expenses such as buying a new mobile phone or a two-wheeler.

4. Investment Options

Both gold and silver are now available in multiple digital options apart from physical purchases. There are now Exchange Traded Funds (ETFs), precious metal contracts on exchanges, mutual funds and more through which you can invest in these metals without making a physical purchase.

But as compared to silver, there are more investment options for gold in India. Not just in numbers, the gold investment options in India are highly convenient and readily available too. For instance, banks now offer digital gold, which allows investors to start investing in gold with as little as Re 1. This gold can be kept in digital format or can also be changed to physical gold.

Gold or Silver: What Should You Select?

While silver investment is getting popular now, gold has and continues to be the beloved precious metal in India, not just for jewellery but investment too.

Products like digital gold have made gold investment more affordable and eliminated the need to worry about storage and safe-keeping. If you are planning to invest in precious metals, consider the points discussed in this post to make the right decision.

Happy Investing

Source: Icicidirect