Gold & silver are the iconically ground-yielding investment with good returns. To make gold your go-to invinvestment, you need to know where to invest and where to sell, the ideal form of investment in the changing economic cycles.
Digital gold is one of the new concepts where you may buy, store, and sell gold online. It is a conventional and easy process with better financial gains. Much of its kind is related to Sovereign Gold bonds (SGBs), ETFs, and or gold schemes with merchants.
One can ensure better transparency on Digital Gold as an investment option as an investor. Today’s Gold can be bought based on purity, safety & liquidity.
Table of Contents:
- ⇾ Digital Gold Highlights
- ⇾ Comparison: Digital Gold vs. Other Gold Investments
- ⇾ Eligibility Criteria to invest in Digital Gold
- ⇾ Reasons to Invest In Digital Gold
- ⇾ Procedure to Invest in Digital Gold
- ⇾ Advantages of Digital Gold
- ⇾ Provisions by Indian NBFCs & Banks for Digital Gold Investment
- ⇾ Frequently Asked Questions
Digital Gold Highlights
Digital Gold is a way to invest in gold without holding the physical metal. When you buy Digital Gold through an online platform, you’re essentially purchasing a certain amount of gold stored securely in a vault by the provider.
Here’s how it’s different from other gold investments:
- Physical Gold: You own actual gold, but it’s stored for you, so you don’t have to worry about keeping it safe yourself.
- Gold ETFs: These are funds that track gold prices but don’t involve owning physical gold.
- Sovereign Gold Bonds: Government-backed bonds that pay interest and are linked to Government-backed bonds that pay interest and are linked to the price of gold. the price of gold.
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Digital Gold vs. Other Gold Investments
| Criteria | Digital Gold | Physical Gold / Gold ETFs / Sovereign Gold Bonds |
|---|---|---|
| Storage | No storage worries; securely stored by provide | Physical Gold: Requires storage (home, locker, etc.) |
| Gold ETFs & SGBs: Held in electronic form | ||
| Liquidity | Instant liquidity; can be sold anytime | Physical Gold: Selling can take time |
| Gold ETFs: Traded on stock exchanges | ||
| SGBs: Fixed tenure; early redemption possible | ||
| Cost | Lower transaction costs | Physical Gold: Higher costs (making charges, etc.) |
| Gold ETFs: Brokerage fees apply | ||
| SGBs: No transaction cost; small management fee | ||
| Ease of Access | Easily accessible online; no Demat account required | Physical Gold: Requires purchase from stores |
| Gold ETFs: Requires Demat account | ||
| SGBs: Requires an account with authorized banks | ||
| Interest Payments | No interest payments | Physical Gold & Gold ETFs: No interest payments |
| SGBs: Pays annual interest (around 2.5% per annum) | ||
| Redemption | Can be sold at any time | Physical Gold: Can be sold anytime |
| Gold ETFs: Traded anytime | ||
| SGBs: Fixed tenure; early redemption with penalties |
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Eligibility Criteria to Invest in Digital Gold
It is important to know, who would most likely invest in Digital Gold provided:
- Small Investors: If you’re starting with a small amount and want to build your gold portfolio gradually, Digital Gold is a great option.
- Beginners: Perfect for those who are new to investing in gold and want a simple, accessible option.
- Tech-Savvy Investors: Ideal for those comfortable with online transactions and looking for a modern way to invest in gold.
Reasons to Invest in Digital Gold
Let’s go through the reasons to invest in digital gold, instead of opting for other gold investment options.
- Convenience: Buy, store, and sell gold online without leaving your home. Fast and straightforward process.
- Affordability: Start investing with as little as ₹1, making it accessible to everyone.
- Security: Your gold is stored in secure, insured vaults, with regular audits to ensure protection.
- Liquidity: Buy or sell Digital Gold anytime, 24/7, offering flexibility and control over your investment.
- Transparency: Real-time market prices with no hidden fees, ensuring you get fair value for your money.
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Ways to Invest in Digital Gold
Buying: You can buy Digital Gold online, even in small amounts—down to ₹1.
Storing: The gold you purchase is stored by the service provider in secure vaults, and you receive a digital certificate as proof of ownership.
Selling: When you’re ready to sell, you can do so through the platform, and the money is credited to your account immediately.
Choose a Platform to Invest in Digital Gold
First, pick a reputable platform like Paytm, PhonePe, or Google Pay. Make sure the platform is well-known and offers secure transactions.
Here is a step-by-step guide to invest in smart digital gold:
- Download the App: Get the app from your chosen platform.
- Register: Create an account and fill out your profile.
- Select Gold: Go to the gold investment section.
- Enter Amount: Decide how much gold you want to buy, either in grams or rupees.
- Confirm Payment: Choose your payment method and complete the purchase.
- Receive Certificate: You’ll get a digital certificate that proves you own the gold.
Complete KYC Requirements
If you’re making larger transactions, you’ll need to complete the KYC (Know Your Customer) process, which usually involves submitting your ID and other documents.
Storing Digital Gold
When you buy Digital Gold, it’s stored securely by the service provider in insured vaults. These vaults are managed by third-party custodians, and regular audits are conducted to ensure that the gold is safe and accounted for.
Redeeming Digital to Physical Gold
If you prefer, you can convert your Digital Gold into physical gold, like coins or bars. Most platforms offer this option, though there may be a small fee for making and delivering the physical gold.
Selling Digital Gold
Selling your Digital Gold is simple. Just sell it back through the platform, and the money will be deposited into your account immediately.
Price Transparency
The price for buying and selling Digital Gold is based on real-time market rates, so you always get a fair deal.
Note:- The security measures in place include the storage of gold assets in insured vaults, ensuring comprehensive protection against potential risks. Ownership is documented through digital certificates, which serve as verifiable proof and are accessible via the platform. Furthermore, regular audits are conducted by independent third-party auditors to maintain transparency, integrity, and trust in the storage and ownership processes.
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Advantages of Digital Gold
- Flexibility: With Digital Gold, you can start small and gradually build your investment over time, without needing a large sum upfront.
- Accessibility: No need for a Demat account or complex paperwork—if you have a smartphone, you can invest in Digital Gold.
- Zero Storage Hassle: There’s no need to worry about storing or insuring your gold, as the service provider takes care of all that.
- No Making Charges: Unlike buying jewelry, there are no additional costs beyond the market price of the gold.
NBFCs & Banks for Digital Gold Investment
There are various NBFCs and financial apps providing options to invest in digital gold. You cna start investing right from your mobile phone, hassle-free, in simple steps. Let’s go through the features offered by digital loan apps and platforms from below:
- Trusted Platforms: Many Indian NBFCs and banks partner with trusted digital gold providers like MMTC-PAMP, SafeGold, and Augmont to offer secure and reliable investment options.
- Easy Access with Mobile Apps & Online Banking: Banks and NBFCs provide easy access to Digital Gold investment through their mobile apps and online banking platforms, allowing you to invest any time, anywhere.
- Low Minimum Investment: Many institutions allow investments starting from as low as ₹1, making it accessible to all customers.
- Secure Storage with Insured Vaults: The gold you buy through these platforms is stored in secure, insured vaults, giving you peace of mind regarding the safety of your investment.
- Transparency on Real-Time Prices: NBFCs and banks offer real-time market prices for buying and selling digital gold, ensuring transparency and fair value.
- Flexible & Easy Redemption Options: You can redeem your digital gold as physical gold (coins or bars), or sell it back to the provider at any time, giving you flexibility and liquidity.
- Loyalty Programs - Rewards & Discounts: Some banks and NBFCs offer loyalty points or discounts on transaction fees as part of their digital gold investment schemes, enhancing the overall value of your investment.
- Regulatory Compliance as per RBI Guidelines: Investments through Indian NBFCs and banks are regulated under RBI guidelines, ensuring that all transactions are compliant and secure.
Beside digital gold, you can also check other related gold topics
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Frequently Asked Questions
Digital Gold is a form of gold investment where you buy gold online, and it’s stored securely in a vault by the service provider.
Digital Gold is backed by physical gold stored in insured, secure vaults, with regular audits to ensure its safety.
Yes, many platforms allow you to convert your Digital Gold into physical gold, like coins or bars.
Yes, you may have to pay capital gains tax when you sell your Digital Gold, depending on how long you’ve held it.
You can start investing in Digital Gold with as little as ₹1. The maximum limits vary by platform and may require KYC verification.
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