Digital Gold Investment: Explore the Different Ways
Explore different ways you could invest in digital gold
Digital Gold Investment: Explore the Different Ways Do you have the option of buying the gold you need in exchange for ₹1? It's not possible at your local jewellery shop. However, you can purchase Digital Gold online for as low as ₹1. The investment value of gold has shown a reasonable return with a compound annual growth rate (CAGR) of 12.4% in the last five years. In periods of high risk to the system and high inflation, gold has proven its capability to be a reliable portfolio diversifier.
What is Digital Gold? As the name suggests, "digital gold" is an online asset that lets you hold gold without having it in its physical form. The seller stores an equivalent amount of gold in a secure vault after you make any purchase online.
How Investment in Digital Gold Works? The transaction is processed online when you purchase Digital Gold, allowing you to make transactions at market prices. The rate of digital gold is determined by many factors, like the global price of gold, custom taxes, and exchange rates. Since gold is priced in a fluctuating market after initiating the transaction, a maximum of five minutes is set for you to finish it. Beyond that, the rate could fluctuate.
The transaction is completed when you confirm your order and verify it with the OTP. The virtual gold equivalent to your invested amount is immediately added under your name. An online platform like SayF allows you to invest gold when you are most comfortable since it's accessible 24 hours a day. Additionally, you can begin your investment starting with just ₹ one and make small investments that are affordable under every circumstance.
Similarly, when you wish to sell digital gold, you must choose the amount and quantity you want to sell, verify the market price, and then place the sell order. The gold will be taken out of your account after accepting or processing the sell request, and the same amount will get credited to your account.
Why is Digital Gold Investment Gaining Popularity? Quality: Before hallmarking, gold purity was the primary concern for all when buying physical gold. However, as we can see, such problems can be easily eliminated while buying digital gold. Locker and security fees: Keeping physical gold is a precarious business, and storing it in bank lockers adds an extra burden to your pocket. In contrast, digital gold cannot be stolen from the online security vault and is tradeable. Passive Income Source: Earning an income from gold isn't an option when buying gold in its physical form. It requires the transfer of funds when kept in lockers; however, investors can earn a passive income that comes in interest in digital gold. Making Charges: Investors buying physical gold in jewellery form must be prepared to pay at least 8% in making charges in addition to the cost of gold, which can increase the price, thereby decreasing their return. To avoid this, investors are now attempting to purchase digital gold, which is free of charge. Accessible: The advancement of technology has made it easier to access information for all. With increased knowledge and understanding, investors have become aware of various investment approaches. Investors realize the differences between investment in physical gold and digital gold. Higher Return: There was a time when the funds held in FDs could double in five years. However, the population has begun switching to more secure and higher-yielding assets because the rates are far below inflation levels.
Different Ways to Invest in Digital Gold In the next section, we mention four different ways to invest in digital gold:
1)Multi Commodity Exchange It's an online platform allows trading commodities such as gold, copper, silver, lead zinc, crude oil, and more. It is an essential platform for commodity-related trading in India.
2) Sovereign Gold Bonds(SGBs) SGBs stands for Sovereign gold bond, an alternative to physical gold. The Reserve bank of India issues SGBs on behalf of the government. These gold bonds come with unique tax benefits. The capital gain on an SGBs gold bond is free of tax after eight years; however, any sale before maturity will have additional tax charges. Each bond represents a unit gram of gold, and investors can get a return at the interest rate of 2.5% every year.
3)Digital Gold Wallets Investors can purchase digital gold through various mobile e-wallets like SayF. Three organizations offer online gold to investors in India: 1. Augmont Gold Ltd. 2. MMTC-PAMP India Pvt. Ltd 3. SafeGold.
4) Gold ETFs Gold ETFs are a passive investment source based on gold prices and investment in bullion gold. The direct pricing of gold provides total transparency of the assets. Additionally, due to the unique design and process, ETFs are much less expensive when compared to investments in physical gold.
A precursor for your investment journey in Digital Gold
Why is gold the safest metal to invest, what makes it so unique in nature and our perception towards accumulating it, lets take a look.