Neutral impactCommodity
Is Buying Gold On EMI A Smart Financial Decision?
NDTV Profit 2 hrs ago·14 Oct 2026, 11:21 am
Investors are increasingly considering buying gold on an equated monthly installment (EMI) plan, which allows them to pay for the asset in installments rather than a lump sum. This approach can make gold more accessible, especially for those who wish to diversify their portfolio but lack immediate cash. However, it is crucial to understand that you are paying interest on the loan, which can significantly reduce the overall returns on your investment.
This strategy matters because it changes the cost basis of your gold. If the price of gold does not rise enough to cover the interest paid on the EMI, the investment may not generate a profit. Investors should also be aware of the risks, such as the potential for the gold price to fall, which could leave them with a liability greater than the asset's value.
Moving forward, investors should compare the interest rate of the EMI against the expected return on gold. They must also consider their own liquidity needs and risk tolerance. It is generally advised to treat gold as a long-term hedge rather than a quick way to make money, and to ensure that the financing costs do not outweigh the potential benefits.
Key takeaways
- Category: Commodity.
Why it matters
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