HDFC Bank offers schemes for customers to invest in gold as well as avail loans against gold. The Sampoorna Bharosa Gold Loan gives customers the opportunity to pledge their gold as security and avail of an instant loan over the counter to meet their financial requirements. HDFC also has its own Gold Exchange Traded Fund which invests in gold bullion with an objective of generating returns on the lines of the performance of gold. There is also an option to invest in the HDFC Gold Fund which invests in the HDFC Gold ETF.
HDFC Gold Loan
HDFC offers loans against gold under the Sampoorna Bharosa Gold Loan. All individuals can avail of this loan by walking into a HDFC Bank branch. The gold to be offered as security needs to be brought to the branch which will then be valued. Based on the valuation, the bank will offer various products for the customer to make a selection. HDFC Bank account holders can benefit further from simplified documentation and faster processing time. Customers who have a strong banking relationship with HDFC will be offered preferred rates of interest.
- The loan is disbursed for non-speculative activities such as agricultural, business and personal purposes. The loan cannot be used to purchase land, gold, jewels and so on.
- The minimum loan amount available is Rs.50,000. For rural sectors, the minimum limit might be relaxed.
- The tenures available range between 6 months and 48 months.
- To repay the loan, only the interest needs to be serviced. A monthly outflow as low as Rs.1,000 per lakh of the loan needs to be repaid, which is calculated based on an indicative interest rate of 12% p.a.
- In case you wish to repay the loan ahead of time, the HDFC gold loan comes with zero foreclosure charges.
- HDFC guarantees security of the gold you offer as collateral.
- The loan process is quick and is disbursed over the counter.
- The loan can be disbursed within 1 hour subject to valuation and verification of the gold and the documents submitted.
- HDFC offers flexible pricing and tenures for the loan.
- There are special rates of interest offered to Preferred, Classic, Imperia and Women customers.
Customers who wish to avail of the HDFC Gold Loan can submit the following documents:
- PAN card is mandatory
- Any one of the following:
- Valid Passport
- Valid Driving Licence
- Voter’s ID
- Aadhaar Card
The interest rate offered on the HDFC Gold Loan for the period of April to June 2016 is as follows.
|Minimum Interest||Maximum Interest||Mean Interest|
|9.60% p.a.||15.65% p.a.||11.84% p.a.|
Fees and Charges
There are certain fees associated with the HDFC Gold Loan. These charges have been listed below.
|Processing||Zero to 0.5%|
|Valuation||For loans up to Rs.1.5 lakhs, Rs. 250. For loans above Rs.1.5 lakhs, Rs. 500.|
|Late payment||2% p.a. penal interest rate|
|Foreclosure||Zero to 1%|
|Part payment||Up to 1%|
|Processing charges for renewal||Up to Rs.250|
|Stamp duty||As applicable by state laws|
HDFC Sovereign Gold Bond
Sovereign Gold Bonds are issued by the Government of India through the Reserve Bank of India. These bonds are a safe way to buy and invest in gold. As these are bonds translate into digital gold, there is no requirement for lockers and storage. The third tranche of bonds was opened for application on 8th March 2016 to 14th March 2016, and were issued on 29th March 2016.
- The interest offered on the bonds is 2.75% p.a. guaranteed. Interest is credited half yearly into the holder’s account.
- To subscribe to these bonds, investors must buy at least 2 grams.
- The maximum investment permitted is 500 grams per individual in one year.
- The tenure of these bonds is 8 years.
- There is a lock-in period of 5 years, after which the bonds can be sold.
- The bonds will be tradable on the Stock Exchange.
- There is no Tax Deducted at Source on the bonds.
- There are no capital gains tax on redemption.
- The bonds can be used as collateral for loans.
- Investing in the bonds can be done through net banking.
- Indian residents
- Individuals, Trusts, HUFs, Universities, Charitable institutions
HDFC Gold ETF
HDFC offers its customers a smart way to invest in gold. The Gold Exchange Traded Funds are a cost-efficient way to invest in gold without buying the physical metal. The Gold ETF is a growth option fund.
Features and benefits
- The ETF invests directly in gold of 99.5% purity.
- In order to purchase gold ETF units, customers need a demat account.
- The gold ETFs can be bought in small denominations and each ETF represents 1 gram of gold.
- Investment in the ETFs are tax efficient.
- ETFs are listed on the the stock exchange and can be traded easily.
- Unlike physical gold, the ETFs do not need to be stored.
- Investors have the flexibility to invest in small lots or according to their preference.
- There is no wealth tax associated with the ETF.
- The brokerage associated with buying and selling is 0.5% or lesser.
Gold ETF DIYSIP
The HDFC Gold Exchange Traded fund has the option of Do it Yourself Systematic Investment Plan. The DIYSIP is a good investment option for people who need to buy jewellery later on for events in the future. Investors can buy units of gold at different points in time. This helps average of the price of the units of gold.
HDFC Gold FUND
The HDFC Gold Fund is an open-ended fund of fund scheme. The fund invests in the HDFC Gold Exchange Traded Fund. The investment in the gold fund is a direct plan with growth option.
- To invest in the fund, a minimum purchase of Rs.5,000 is required.
- Additional investment can be made by purchasing at least Rs.1,000.
- Investors can also opt for Systematic Investment Plans.
- To invest through an SIP, customers can opt for monthly or quarterly installments.
- The minimum requirement for monthly installments is Rs.500 and in multiples of Rs.100 thereafter.
The minimum requirement for quarterly installments is Rs.1,500 and in multiples of Rs.100 thereafter.
HDFC Bank has many options to invest in gold without actually purchasing the metal. Customers have better access to investing and getting returns for gold. For customers who need a loan quickly in times of need, HDFC offers one-hour processing loans against gold based on the valuation of the gold offered.
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