Frequently Asked Questions
What is Gold Investment Plan?
Gold Investment Plan is an investment facility which allows investor to accumulate money for buying gold for specific purposes. The investor shall invest on a monthly basis in Nippon India Gold Savings Fund (FOF scheme) over his desired investment horizon.
How it works?
Gold Investment Plan allows investor to accumulate money to aim to buy gold for specific purpose. The investor shall invest on a monthly basis in the Scheme over his desired investment horizon. Units of Nippon India Gold Savings Fund will be allotted based on the investment made on a monthly basis at the applicable NAV.
Nippon India Gold Savings Fund is a Fund of Fund which invests in Nippon India ETF Gold BeES, which in turn invests in physical gold.
The investor will be required to provide One Time Bank Mandate (OTBM) for enabling debits of variable amounts from his bank account for investing in Nippon India Gold Savings Fund.
The amount of investment at predefined basis (monthly) would vary subject to the prevailing gold price on NCDEX.
The investor would receive an Alert message in advance of the approximate amount that shall be debited from the account on monthly basis. Investor has the option to opt for same or vary.
It may be noted that the spot price of Gold on NCDEX is exclusive of GST which investor will have to pay when he buys physical gold.
Investor can redeem from Nippon India Gold Savings Fund at applicable NAV subject to exit load, if any.
Who can Invest?
The units of the scheme are being offered to the public for subscription.
The following persons (subject, wherever relevant, to purchase of units being permitted under their respective constitutions and relevant State Regulations) are eligible to subscribe to the units:
(1) Resident Adult Individuals , either single or jointly (not exceeding three).
(2) Parents / Lawful guardians on behalf of Minors
Please note that this is an indicative list. RNAM reserves the right to include / exclude new / existing categories of investors to invest in this Scheme from time to time, subject to SEBI Regulations, if any.
Where the funds will be invested?
The funds will be invested in Nippon India Gold Savings Fund (an open ended Fund of Fund Scheme) which in turn invests in Nippon India ETF Gold BeES. Nippon India ETF Gold BeES is a Gold Exchange Traded Fund (ETF) which invests in physical Gold of 99.5% purity.
Is there any lock-in period?
No, there is no lock-in period. However, if the investment is redeemed or switched out on or before completion of 1 year from the date of allotment of units, 2% exit load will be applicable.
Are there any load/charges/expenses?
The investors in the Nippon India Gold Saving Fund (NGFS) will be charged a maximum of 1.50% of the daily net assets including the expenses charged in its underlying investments in Nippon India ETF Gold BeES and additional expenses as allowed by sub regulation 6A of regulation 52 of SEBI Mutual Fund Regulations, 1996.
Entry Load - Nill
In according with the requirmnts specified by the SEBI circul no. SEBI/IMD/CIR No.4/168230/09 dated June 30,2009 no entry load will be charged for the Fund with effect from August 01,2009.Similary,no entry load will be charged with respect to application for registration under systematic investment plans/Systematic transfer plans accepted by the Fund with effect from August 01,2009.
Exit Load: 2%- If redeemed or switched out on or before completion of 1 year from the date of allotment of units;
Nil - If redeemed or switched out after the completion of 1 year from the date of allotment of units. Illustration:
|Time for which units held||1000 Units Redeemed||Applicable NAV*||Exit Load Applicable||Value||Redemption Amount|
|All units held for more than 1 years from the date of allotment||1000||10||0%||10000||1000|
|All units held for less than 1 years from the date of allotment||1000||10||2%||9800||9800|
|800 units more than 1 year + from the date of allotment||800||10||0%||8000||9960|
|200 units less than 1 years from the date of allotment||200||10||2%||1960|
For latest expense ratio and Exit load please refer
This calculation is for illustration purpose only
How to Invest?
Investment will be made in Nippon India Gold Savings Fund on a monthly basis. The Gold Investment Plan includes a debit of predefined (monthly) which would be varying subject to the prevailing rate of Gold. Each month the investor would receive a specific Alert for an approximate amount that will be debited from the account. This amount would vary as per the prevailing Gold price.
Will the Monthly Investment Amount remain fixed or would be variable? What will be the minimum quantity & tenure for Gold Investment Plan
The Monthly investment amount will vary based on prevailing gold price. The investor should note that the price of gold referred is as prevalent in India.
The initial minimum application amount for investing in Nippon India Gold Savings Fund is Rs. 100 and in multiples of Re. 1 thereafter. The Additional Purchase Amount for investing in Nippon India Gold Savings Fund is Rs. 100 and in multiples of Re. 1 thereafter.
Hence for the simplification purpose the initial investment amount through Gold investment Plan will be equivalent to price of 0.5 grams of gold (Currently being more than Rs 100) and the subsequent purchases can be equivalent to price of 0.5 grams of gold and above.
How will the Monthly Investment Amount calculated?
The Monthly Investment amount will be determined based on the total Gold which needs to be accumulated over the investment horizon divided by number of months. This would be multiplied by the prevailing spot price of Gold on NCDEX of the previous day from the date of investment.
It will be calculated as follows:
(Total Gold to be accumulated (In gms))/(No. of months*10)*Prevailing NCDEX Gold spot price
The Monthly investment amount would vary depending on the prevailing spot price of Gold on NCDEX. Hence, the investor shall give One Time Bank Mandate (OTBM) for upto certain amount to enable debits of variable amounts from the investor’s bank account for investing in Nippon India Gold Savings Fund.
E- OTBM is an online registration process wherein the investor can invest with Nippon India Fund in a simple, convenient and paperless manner. It is an authorization to investor’s bank account to debit money up to a certain limit to Nippon India Fund. Investor can use this facility whenever he is transacting in any of the Nippon India Fund schemes.
For instance, if an investor wants to buy 1 Kg. gold over next 12 months and the spot price of Gold on NCDEX is Rs. 30,000/- per 10 gm (assumed), he may invest in Nippon India Gold Savings Fund through monthly investment route. Assuming he wants to invest 10 gms of gold equivalent amount in the Fund initially, the initial purchase will be computed as below:
[10/10)]*30000 = Rs. 30,000/-
The balance quantity of gold which the investor wishes to buy would be divided equally over the remaining months to arrive at the subsequent monthly purchases. Since the subsequent purchases would vary based on prevailing gold prices, the investor shall provide OTBM of a specific amount. Lets assume the investor gives an OTBM of Rs. 1,00,000/-.
Suppose next month, the spot price of Gold on NCDEX is Rs. 33,000/- per 10 gm, the investment amount for next month would be:
[(10/10)]*33000 = Rs. 33,000/-
And subsequent purchases would be computed in similar manner.
How can the investor redeem?
An investor can redeem units from Nippon India Gold Savings Fund on all business days directly from the AMC At applicable NAV and exit load
What will be the taxation?
The taxation would be as follows:
• Long Term Capital Gain Tax (after 3 year) of 20% with indexation will be applicable.
• Short Term Capital Gains (before 3 Year) applicable as per tax slab for the investor.
The tax rates will be increased by surcharge, Health and Education as applicable. Further please refer the Taxation portion of SID and SAI for complete details. Tax rates provided are as per the prevalent tax structure.