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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.

FAQs On Rules For Investing in Silver in India

Is investing in silver better than investing in gold?

Though gold has more value than silver, it is surprising to see that people of every nation is investing more in silver than any other precious metals. Not to mention, gold is one of the precious metals. Gold is bought only for accumulation. Silver has all kinds of industrial applications. In addition, investors can easily trade in silver at an economical price.

Is silver a safe investment?

When you compare gold and silver, Gold is a risky asset. And according to economists, it is not a wise option to invest only in gold. Along with the investment in risky asset, it is always advisable to invest in a risk free low valued assets. Silver is one of the options to go for. The value will never depreciate and you will not block your money investing a huge amount.

Can I invest in silver with little money?

Unlike gold, where you need to invest thousands of rupees, silver coins can be bought with a few hundred rupees. The return on investment for silver with a CAGR for 8.8% yields profits.

Is Silver a good long-term investment?

If you compare silver with gold, Silver is more affordable than gold for the returns that you can expect from an investment point of view. Investing in Silver coins or bars would certainly make a good investment. Simply because, five to ten years down the line, if you sell the coins, it will be of a higher value.

Should we go for physical silver investment?

It is always advisable to invest silver as a 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. However, increase in demand for the silver metal is creating a risk for people in the future. Market should be in a good position for people to invest in silver. With the increase in demand and less supply, the value of silver is increasing. It is your choice whether you go for silver investment or not, but before going for the investment you should research the market properly and take advice from the finance experts.