National Spot Exchange (NSEL),
an electronic spot market promoted by Financial Technologies India Ltd
(FTIL) and National Agricultural Co-operative Marketing Federation of
India Limited (NAFED), has launched a unique investment product
in the form of demat gold. The segment, which is similar in functionality to the cash segment in
equities, offers commodities in the demat form in smaller denominations
(e.g. 1, 2 3.....gms). This is expected to be a big hit with the retail
investors, who have been waiting for an investment product in
commodities.
Opening a separate Demat and Trading account for trading in NSEL
First of all you will have to open a Demat and Trading account with one of the authorized participants with NSEL. This has to be a separate trading account from the one that you might be using for trading stocks.
There is a list of authorized depository participants (DPs), and you can open an account with any of these to start trading in NSEL. You can expect to pay an initial charge of about Rs. 350 or so for opening the Demat account depending on who you open this with, and then expect a slightly lower AMC (Annual Maintenance Charge) of about Rs. 250 or so every year on this account. Some DPs might offer you a scheme where if you give them a refundable deposit of Rs. 2,000 they will waive off the opening charges, and subsequent AMC, so you can check that up. To open an account, you will require documents such as PAN, 3 passport photographs, bank proof, and address proof.
Buying E-Gold, E-Silver, E-Copper, E-Zinc or E-Lead through NSEL
Once you have your account set up, you can then carry out transactions. You can buy gold, silver or copper, and one unit of the E-Series is equivalent in the following way:
1. E-Gold: 1 gram
2. E-Silver: 100 grams
3. E-Copper: 1 kilo
4. E-Zinc: 1 kilo
5. E-Lead: 1 kilo
The commission to transact is about 0.5% if you take the delivery, and 0.05% for intra – day trading.
You can trade the E-Series from 10:00 in the morning to 11:30 in the night on weekdays, and the settlement is done on a T+2 basis.
The price of the three contracts is visible on the website of NSEL, and once you buy a contract, it will be credited to your demat account after settlement.
Converting E-Gold, E-Silver or E-Copper in Physical Form
You can hold the E-Series products in Demat form, and you also have the option of converting it into physical form – this is known as rematerialization.
There are two key things to note here:
1. Rematerialization is currently not done in every city, so if you need this option, then check with the agent first.
2. VAT: When you rematerialize you will have to pay some rematerialization charges (which will be in the range of Rs. 200 for 10 grams gold), but the VAT might be a bigger amount based on how much electronic quantity you hold.
Currently, there are no holding charges, but you can expect to pay holding charges sometime in the future, if not immediately.
Opening a separate Demat and Trading account for trading in NSEL
First of all you will have to open a Demat and Trading account with one of the authorized participants with NSEL. This has to be a separate trading account from the one that you might be using for trading stocks.
There is a list of authorized depository participants (DPs), and you can open an account with any of these to start trading in NSEL. You can expect to pay an initial charge of about Rs. 350 or so for opening the Demat account depending on who you open this with, and then expect a slightly lower AMC (Annual Maintenance Charge) of about Rs. 250 or so every year on this account. Some DPs might offer you a scheme where if you give them a refundable deposit of Rs. 2,000 they will waive off the opening charges, and subsequent AMC, so you can check that up. To open an account, you will require documents such as PAN, 3 passport photographs, bank proof, and address proof.
Buying E-Gold, E-Silver, E-Copper, E-Zinc or E-Lead through NSEL
Once you have your account set up, you can then carry out transactions. You can buy gold, silver or copper, and one unit of the E-Series is equivalent in the following way:
1. E-Gold: 1 gram
2. E-Silver: 100 grams
3. E-Copper: 1 kilo
4. E-Zinc: 1 kilo
5. E-Lead: 1 kilo
The commission to transact is about 0.5% if you take the delivery, and 0.05% for intra – day trading.
You can trade the E-Series from 10:00 in the morning to 11:30 in the night on weekdays, and the settlement is done on a T+2 basis.
The price of the three contracts is visible on the website of NSEL, and once you buy a contract, it will be credited to your demat account after settlement.
Converting E-Gold, E-Silver or E-Copper in Physical Form
You can hold the E-Series products in Demat form, and you also have the option of converting it into physical form – this is known as rematerialization.
There are two key things to note here:
1. Rematerialization is currently not done in every city, so if you need this option, then check with the agent first.
2. VAT: When you rematerialize you will have to pay some rematerialization charges (which will be in the range of Rs. 200 for 10 grams gold), but the VAT might be a bigger amount based on how much electronic quantity you hold.
Currently, there are no holding charges, but you can expect to pay holding charges sometime in the future, if not immediately.
No comments:
Post a Comment