4 Things To Check While Buying Gold Coins

Diwali is here and it's time to buy the yellow metal. Yes, It's considered auspicious to buy gold around Diwali. There's no better time to buy gold than the eve of Dhanteras. You can buy gold, not only in the form of jewelry, but also gold coins. When we talk of gold coins, we mean the round gold medallion, bought for saving or gifting purposes.

So why buy gold coins? It's good to have 5-10% of your portfolio in gold. Gold is known to go up when stocks crash. It will diversify your portfolio.

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4 Things To Check While Buying Gold Coins

I know you're eager to buy gold coins on the eve of Dhanteras. But, can you buy gold coins blindly? Aren't you supposed to check these 4 things before buying gold coins?

1. Check the purity of your gold coins

There are 2 ways you can check the purity of your gold coins. Karat and fineness. The purest form of gold is the 24 Karat. The 24 Karat gold is 24/24 parts of gold. For those who don't know, 22 Karat gold is 22/24 parts of gold. While making jewellery, 22 parts of gold is mixed with 2 parts of Zinc or Silver.

Want to check the purity of 24 Karat gold? Take a look at the fineness. Even pure gold contains impurities which the manufacturer has not been able to remove. If you measure the fineness of the purest form of gold (24 carat gold), it shows 999.9 parts per thousand of purity. 

Take a look at gold purity:

999 - 24 carat- Pure Gold

958 - 23 carat

916 - 22 carat

875- 21 carat.

SEE ALSO: Buy Gold Of 99.5% Purity This Akshaya Tritiya

2. Check if your gold is certified by BIS

The Government of India wants to make sure you are not cheated while buying gold. So, it has set up BIS (Bureau of Indian Standards), to certify gold coins and jewelry. BIS certifies your gold coin by stamping it, to certify its purity.

Check these 5 things that are marked on gold:

• BIS Logo - A triangular stamp of the Bureau of Indian Standards. 
• Purity/Fineness like 916 (916 - 22 carat) - This number gives the purity of gold.
• Mark of Assaying and Hallmarking Centre - This tells you where the gold was evaluated and hallmarked.
• Year of Marking (P for 2012 OR S for 2014) - The Code letter represents the year of hallmarking of jewellery and is decided by BIS.
• Mark of the Jeweler - Identification mark of BIS Certified Jeweler.

3. Check the packaging and denominations of gold coins

Make sure that gold coins come in tamper proof packaging. The packaging ensures the credibility of the gold coin. You could buy gold coins in denominations of 0.5 grams to 50 grams. Check with your bank or jeweler to see what denominations they have.

4. Gold coins have lower making charges than gold jewelry

Buying gold coins gives you the option of getting the purest form of gold in the minimum weight of 0.5 grams. What's more, you have lower making charges than gold earnings, gold rings or other gold ornaments. Making charges of gold coins is around 4-10%. Making charges of gold jewelry starts from 8-10% and can go really high, depending on the craftsmanship.

Where can you buy your gold coins? There's your local jeweler or your bank. You can buy gold coins from NBFC's, the Stock Holding Corporation of India and MMTC (a government-authorized public sector unit for the sale of gold and silver). Do remember that if you have bought gold coins from a bank, the bank will not buy these coins back as per an RBI directive. Be Wise, Get Rich.