EGold vs ETF Gold

Most of the investors are greatly confused as to what are the difference between two types of paper gold i.e ETF Gold and E gold

I want to share with you all what I understood from our experts over a period of time what is ETF and E-Gold.

1. ETF gold can be bought and sold like stocks in NSE and BSE and no separate Demat and trading a/c is necessary and the Demat and trading a/c opened for stocks can be used for trading or investment in ETF gold.
2. A separate Demat and trading a/c from the members of National Spot exchange is required to be opened for E-Gold and E-Silver. E-gold and E-Silver can be bought in MCX also (Multi commodity Exchange) If one is already trading in MCX and the same a/c can be used for E-gold and E-Silver.

3. There is no ETF Silver and therefore to invest or trade in silver, E-Silver is only way and a demat and trading a/c from the members of National Spot exchange or MCX is required to be opened.

4. ETF gold can be bought in units the minimum of one unit is equivalent to one gram and E-Gold or E-sliver can also be bought for a minimum of 1 gram.

5. Funds of ETF gold are invested in gold by the fund mangers like SBI gold,Reliance gold etc and therefore the value will rise or fall as per gold rate. E-gold of E-silver rate also fluctuate as per gold rate in National spot exchange and as per MCX gold rate.

6. The Gold rate mentioned in E gold or ETF gold is for pure 24 carrot gold and not that of 22 carat ornamental gold.

7. Both the ETF and E series rates are on real time basis during the market timings of Securities and MCX markets.

8. The ETF market timings are between 9.15 and 15.30 hrs whereas MCX market is between 10.00 and 23.30 hrs.

9. The charges (brokerage, taxes etc) for buying or selling in ETF gold is as per the same rates applicable to NSE/BSE for shares whereas the charges for buying or selling  E-gold and E-silver are as per the charges applied to MCX market .

10. There are no separate charges for storing (warehousing) the gold on behalf us either in ETF or in E-gold or E-Silver however annual Demat maintenance charges are levied.

11. Physical delivery for every 8 gram of E-gold and silver can be taken provided one pays VAT whereas physical delivery is not possible in ETF and however after physical delivery selling in the open market is subject to various difficulties.

12. In both securities and commodity markets future trading is possible.

13. Profit on sale of ETF gold within one year will be clubbed to the income of the individual and taxed and more than one will attract long term capital gain tax whereas profit on sale of gold in Spot exchange or MCX after three years will attract long term capital gain tax.