Zebu blog

Category: Gold Bonds

  • Gold vs. Bonds: A Choice Between Comfort and Control

    When markets get rocky, investors don’t look for the most “profitable” asset—they look for the one that feels safe. In India, that usually comes down to two familiar names: gold and bonds.

    At first glance, they may seem like alternatives. But dig a little deeper, and you’ll realize—they speak to very different instincts. One is emotional. The other, structural. One shines in chaos. The other builds calm. At Zebu, we talk to thousands of investors across the country. And when volatility strikes, the most common question we hear is: “Where should I park my money now?“

    Let’s unpack the real difference between these two pillars of Indian investing—and what makes each one powerful in its own right.

    Gold: The Emotional Armor

    Gold in India isn’t just an asset. It’s woven into culture, rituals, even memories. But there’s more to its financial appeal:

    • You can touch and store it. That physical presence brings comfort.
    • It’s not tied to governments or institutions. No default risk, no counterparty stress.
    • It often rises when markets fall—a psychological hedge when panic sets in.

    But it has trade-offs too:

    • It doesn’t earn you any interest.
    • Costs like GST, making charges, and spreads eat into returns.
    • And physical storage has risks of its own.

    Still, for many, gold is less about return and more about reassurance.

    Bonds: The Blueprint for Stability

    Bonds don’t sparkle. But they offer something gold doesn’t—structure.

    • Regular interest income
    • Defined timelines and maturity
    • Predictable cash flow

    If gold feels like a safety net, bonds feel like a foundation. Especially when you’re planning for life goals—education, retirement, or just steady income. Of course, bonds aren’t without risk:

    • Rising interest rates reduce bond prices.
    • Some carry credit risk—especially corporate ones.
    • And they can underperform inflation if held short-term.

    But used smartly, bonds can stabilize a portfolio like little else.

    So Which One Wins?

    That depends on what you value.

    • If you want to guard against uncertainty and inflation—gold has your back.
    • If you’re building a plan around cash flow and capital preservation—bonds are your ally.
    • If you want both emotional comfort and logical structure? Use both.

    Many of our users at Zebu layer them. Bonds form the ground. Gold gives the cushion. They’re not rivals. They’re teammates.

    Use Tools, Not Gut Alone

    Modern investing platforms—ours included—offer tools to help you decide.

    • Risk profiling
    • Asset simulators
    • SIP planning in Gold ETFs and Bond Funds
    • Diversification models

    These aren’t just for advanced traders. They’re built so anyone can invest with clarity—not guesswork.

    Final Word: Safety Is Personal

    For some, safety looks like a locker of gold coins. For others, it’s a bond ladder maturing every year. For you, it might be both.

    Whatever you choose, make sure it suits your life, not just the markets.

    Because in the end, your peace of mind is the real return.

    Disclaimer

    This blog does not provide investment advice; it is merely meant to be informative. Zebu disclaims all liability for financial decisions based on this content and makes no guarantees regarding accuracy or returns. A certified financial advisor should always be consulted before making an investment.

    FAQs

    1. Is it better to invest in gold or bonds?

      Gold vs gold bond depends on your goals. Physical gold offers liquidity and hedge against inflation, while bonds provide regular interest and more predictable returns.

    2. What are the risks of investing in bonds?

      Bonds, including sovereign gold bond vs digital gold options, carry risks like interest rate changes, credit risk, and inflation eroding returns.

    3. What are the disadvantages of buying gold bonds?

      Gold bonds may have lower liquidity than physical gold and limited flexibility if you need quick cash.

    4. Can I invest in both gold and bonds for better returns?

      Yes, combining gold and bonds can balance risk and returns while diversifying your portfolio.

    5. Which is safer for my savings, gold or bonds?

      Bonds are generally safer for stable returns, while gold protects against inflation but can be volatile in price.

  • This Diwali, Invest In Gold With Gold ETF

    Indians have always liked gold a lot, and this has been true for a long time. India didn’t get its first gold exchange-traded fund until 2007, though (Gold BeES). Gold is the asset that these ETFs are based on. Gold ETFs also give you a way to invest in the gold market in India.

    And this Diwali, when it is considered auspicious to invest especially in gold, you can buy its ETF on the share market with your Zebu trading account.

    Exchange-traded funds (ETFs) for gold, also called gold ETFs, are open-ended mutual fund plans based on the price of gold, which changes all the time. There are a lot of costs involved in making real gold. Gold ETFs are a way for investors to get into the gold market. They are a great choice for long-term investors who want to beat inflation.

    Gold is also a safer investment than stocks because it doesn’t change as much. Because of this, it gives you the chance to invest in gold and trade stocks. Some fund companies make money by buying and selling gold bullion. Because of this, they have to keep a close eye on the market. The price of real gold has a straight-line effect on how much gold ETFs are worth. Not only do they not skimp on purity, but they also make sure it is always available everywhere in the country.

    Who should buy gold exchange-traded funds?

    Gold ETFs could be a good choice for investors who want to add exposure to the gold market to their portfolios. It’s a low-risk investment that careful investors should look into. The money is used to buy standard gold bullion that is 99.5% pure. Gold ETFs are a low-risk investment, even though they are bought and sold on stock exchanges. People can buy gold ETFs instead of real gold if they don’t want to pay money to store it or pay extra taxes.

    What Gold ETFs are and what they offer Flexibility

    You can buy gold exchange-traded funds (ETFs) online and put them in your Demat account. The asset management company buys and sells them on a stock exchange (AMC). Even in the Demat format, gold ETFs act a lot like real gold.

    Liquidity

    Gold ETFs are very liquid because they can be traded on the stock market at the going rate during a trading session. Also, transaction costs, such as broker fees and government taxes, are lower than with real gold.

    Smaller capital requirement

    When you go into a shop, you will need a lot of money to buy gold. When you buy and sell gold ETFs, on the other hand, you can choose how much you want to buy and sell.

    It’s easy to take part in the gold market

    Gold exchange-traded funds give investors access to the open, successful, and safe gold market (ETFs). Also, they have a lot of cash on hand because gold is easy and quick to exchange.

    Long-term investment

    Gold ETFs are not subject to a wealth tax like real gold is. Safety and storage are also not issues with a Demat account. Because of this, you can keep your ETFs for as long as you want.

    Tax-efficiency

    Gold ETFs are a tax-friendly way to store gold because the profits they make are taxed as long-term capital gains. Still, sales tax, VAT, or a tax on wealth won’t make things harder.

    Trading on a platform (NSE)

    Investors in gold ETFs can trade in a clear way on the National Stock Exchange (NSE), which is a stock exchange platform.

    Easy transactions

    You can use it as security for loans and list it on the stock exchange to buy and sell it. Since there are no costs to enter or leave, transactions go more quickly and smoothly.

    Risk elements

    The NAV, or net asset value, of a gold ETF can go up or down with the market, just like any other stock fund. In a similar way, other costs, such as the fee for managing the fund, can also change the results.

    This Diwali, if you are interested in investing in Gold, open a Zebu trading account and start investing today. It only takes 5 minutes.

  • What Factors Affect Gold Prices?

    Even though the stock market has had a rough few months, gold is still highly valued, especially in India. India is one of the two biggest consumers of gold in the world, along with China. Each year, India uses more than 25% of the world’s gold.

    Demand for jewellery in the country goes up a lot during the wedding and holiday seasons, which often drives up the price of the item. Even if this rise in demand and price for gold is due to this, there are other factors that affect gold prices across the country. In one of its reports, the World Gold Council (WGC) said that income and the price of gold are two important factors that have a long-term, large effect on consumer demand.

    Some other things that can affect the price of gold are:

    Inflation

    Inflation, which is when the prices of goods and services go up, could have a big effect on the price of gold. Most of the time, inflation has a direct effect on the price of gold. Since inflation makes money worth less, the price of gold usually goes up when inflation goes up. This is because when inflation is high, people tend to store their money in gold because they think its value will stay the same over time. This makes the demand for gold go up. So, gold can also be used to protect against inflation.

    Interest rates

    Historically, interest rates and gold prices have had the opposite relationship. When interest rates go up, people often prefer to sell gold to make more money. But when interest rates go down, more people decide to buy gold, which drives up both its demand and price.

    Festive seasons

    Gold has always been seen as a strategic asset in Indian homes, and it has also become a part of Indian culture. Gold has a special place in the lives of Indian families, from being used in wedding ceremonies to being worn as jewellery on important holidays like Diwali. Gold prices go up during wedding and festival seasons because people want to buy more of it.

    In 2019, the World Gold Council (WGC) did a study that found that Indian families may have as much as 25,000 tonnes of gold. This makes India the country with the most gold in the world.

    Pleasant Monsoon Rains

    Studies show that rural India uses up to 60% of India’s total annual gold use, which is thought to be between 800 and 850 tonnes. So, the agricultural market has a lot to do with the demand for gold in the country, and the farmers’ incomes depend a lot on how well their crops do. When the monsoon rains are good, there is more demand for gold in the country. This makes farmers, who use about a third of the country’s gold, buy gold to build their wealth.

    Reserves on Treasury

    Like the central banks of most other countries, the Reserve Bank of India keeps gold reserves along with their money. The price of gold goes up when the RBI starts to buy more gold than it sells. This is because there isn’t enough gold and there is more cash coming into the market.

    A Way to Deal with Uncertainty

    People often choose to invest in or buy gold as a commodity when the market is volatile. This could be because of a slowing economy or trouble in the government. Gold is seen as a good alternative when other assets lose value because its value stays the same over time. Also, because uncertainty isn’t a number, it has more of a psychological effect on gold prices than other factors.

    Politics and geography

    India is one of the countries that uses gold the most, so any change in the price of gold on the international market would affect how much it costs there. Investors also see gold as a safe place to put their money during times of political uncertainty or geopolitical unrest. This increases the demand for gold, which drives up its price. During times of crisis, people tend to buy more gold, which makes it a good way to store money. Other types of assets, on the other hand, would often lose value during these times.

    What the Rupee Does to Gold

    It is important to understand how the relationship between the rupee and the dollar affects the price of gold in India. Since most physical gold is brought in from other countries, the price of gold in rupees will go up when the rupee falls against the dollar. So, a falling rupee could make India less interested in buying gold.

    Conclusion:

    Gold, which is seen as a valuable financial asset, is one of the most popular ways to invest in India. Investors often turn to gold as a safe place to put their money during uncertain times like geopolitical turmoil or trade disputes between countries. But gold prices in the country are also affected by things like inflation, interest rates, and the rupee-dollar exchange rate.

  • The Best Way To Save Gold – SGB Vs Gold ETF

    Gold is a popular investment choice because it protects against inflation. But when there is more than one way to invest, an investor may not know which one to choose because they all track the price of gold. Tax and investment experts say that the Sovereign Gold Bond and the Gold ETF (Exchange Traded Fund) are best for two different types of investors.

    Gold ETF is better for investors who want to invest for the short term while keeping liquidity in mind because it lets investors sell their money whenever they want. But for medium- and long-term investors, the Sovereign Gold Bond is better because it guarantees a 2.5 percent return and the maturity amount isn’t taxed.

    Both are investments that protect against risk, but investors with little time to invest should choose gold ETF. For investors who want to be able to sell their investments quickly, Gold ETF is a better choice than Sovereign Gold Bonds, which have an 8-year lock-in period if the investor wants the maturity amount to be tax-free.

    If you want to invest in gold over a long period of time, the Sovereign Gold Bond is better because it lets you buy gold in small amounts over time. The Reserve Bank of India (RBI) makes these small amounts of gold available from time to time. But it can’t be traded for 8 years, or 5 years from the date the bond was bought and 3 years after that.

    An investor can withdraw their money after 5 years, but if they do, they will lose the exemption for long-term capital gains (LTCG) that the scheme offers. So, under the Sovereign Gold Bond Scheme, an investor must keep their money invested for 8 years before they can get a tax break. In addition to not having to pay taxes, the Sovereign Gold Bond Scheme gives investors a guaranteed return of 2.5%, which the Gold ETF scheme does not.

    After 8 years, the maturity amount would be sent to the person’s bank account automatically. Iin the Sovereign Gold Bond Scheme, the investor doesn’t get to choose when the bond matures. Instead, the maturity amount is based on the average price of gold at the end of the last three business days before the redemption date.

    Gold ETF also charges fees for fund management and brokerage when an investment is made or sold, which Sovereign Gold Bond Scheme doesn’t do.