Digital Gold: A Simple and Complete Guide

Digital Gold: A Simple and Complete Guide Digital gold is an online and digital method to invest in gold without owning it in physical form. Anyone can buy and sell it online, and the minimum value to buy and sell it is ₹1 . Detailed Information About Digital Gold ‍Digital gold, as the name suggests, is a virtual method of buying gold digitally. It is one of the cost-efficient methods for one who wants to buy gold. For every gram of gold a user buys, a 24k of gold gets stored in the locker under the name of any of these three gold banks in India- Augmont | MMTC - PAMP | SafeGold. Investors can buy, sell and even order physical gold of the same amount at their doorstep in just one click. Additionally, it doesn't have a minimum limit. The investor can start buying digital gold from ₹ 1. In this article, we will give detailed information about this modern investment.

Why is Digital Gold Getting Popular? Owning a physical gold comes up with particular challenges that include identifying the purity and legitimacy of gold. In addition, the safekeeping and storage of physical gold is another major concern. However, you are assured about purity in digital gold, and the gold is safe in vaults.

Advantages of Buying Digital Gold Over Physical Gold Physical gold ownership comes with many challenges and doubts. However, one can buy the same amount of gold online with certified 24k gold. In addition, the owner doesn't need to worry about the gold safety as sellers insure it. To invest in digital gold, one doesn't need to have a certain amount in their bank account. One can go as minimum as ₹1 while investing in digital gold. You can also sell the gold online in the future or get it delivered in physical form at your doorstep. ‍ All this can be done with a few taps on a smartphone!! Sounds Perfect and Genuine? However, there is a drawback that you won't be able to hold it or show it off. Digital gold is gaining popularity between youth and millennials because of the flexibility and easy access to doorstep delivery whenever required. ‍ Buying digital gold from any app means buying it from a 3rd party app, helping the investor invest in digital gold from reputed companies MMTC-PAMP India Pvt. Ltd., Augmont Gold Ltd and Digital Gold India Pvt. Ltd. - SafeGold. They charge a small percentage as investment charges because they are answerable for the security of digital gold. Can one get ownership of the digital gold they buy if they lose login information or smartphone? Yes! You can easily get the ownership of digital gold you own even if you lose your smartphone or forget the login information. Investment in digital gold is just like any other investment that gets registered under your name. The gold is stored in a vault and verified by an independent trustee.

Where Can You Buy Digital Gold? One can easily buy digital gold from a minimum of ₹1 from the SayF app. SayF app is your personal finance app backed by the trusted UPI and NPCI service providers in the market; SayF helps you save, invest, and optimize your spending. ‍ You can buy digital gold without completing KYC, but it has certain limitations. The limitation varies depending upon the investment app terms & conditions.

Pros & Cons of Investing in Digital Gold Pros 1. High Liquidity: You can buy and sell the gold at any time of day at current market rates. 2. It is easy to track. 3. Lockdown forced us to shut down every activity. Jewelry shops were being closed, leading to the increase in the business of digital gold manifold. The rise in investment shows that people like this feature and accept it. 4. You can use digital gold as collateral against any loans.

Cons 1. No passive income generation in the form of interest. 2. Digital gold doesn't come under SEBI and SBI guidelines. 3. Maximum investment every month is limited to the amount of 2 lakh. 4. Once you demand delivery of digital gold at your doorstep, a small management fee is charged by the intermediaries application for holding the gold for you.

However, cons outweigh benefits while investing in digital gold would be better as it offers the benefits of security, high liquidity, and safe delivery. How to Invest in Digital Gold? Like any other online shopping platform, one can easily invest in digital gold online. Here we are mentioning an easy step by step procedure to help you out: 1. Visit any trusted platform that allows you to buy digital gold, such as SayF, Paytm, Amazon, and more. 2. Click on the Gold locker option. 3. Enter the amount you like to invest in purchasing digital gold 4. Move towards the payment section 5. An investor can use different payment gateways such as debit card, credit card, net banking or simply make the payment using an e-wallet. 6. Once the amount gets credited, it will get updated quickly, and the gold gets stored in a 100% safe vault. 7. Investors can easily buy or sell digital gold at a market rate, providing high liquidity. Many 3rd party applications or intermediaries have a certain amount of management fee during gold delivery.

Taxation on Digital Golds ‍ It depends on capital gain from the sale of physical, whether short-term (upto 36 Months) or long-term capital gains( >>36 Months). Capital gain on digital gold for short-term investment isn't strictly taxable. For long-term investment, a 20% tax charge on the whole amount in addition to the surcharge.

Frequently Asked Questions Q: Difference Between Physical Gold and Digital Gold? A: Digital gold is simply buying yellow metal having a purity of 24 k, and investors can access it anytime via digital platforms. One can easily buy, sell and store digital gold via digital channels. In contrast, physical gold is bought for ornamental purposes mainly. Still, it isn't a wise investment option as they come with many additional non-refundable fees such as making charges, locker charges and risk of robbery. Physical gold is a liability rather than an asset.

Q: Why should one invest in digital gold? A: Digital gold offers the customer a smart way of investing in gold. It gives dual benefits to users that it comes with high liquidity and an option of physical delivery.