Digital Gold – Meaning, Benefits and Alternatives

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digital-gold

 

What is the minimum possible amount required to buy gold? Can it be as low as one rupee? We know it sounds abrupt but yes, one can buy gold digitally for as little as one rupee.

 

As you already know, Indians and gold are an unbreakable love story.

 

Gold investments are one of the oldest and most beneficial forms of investing. Purchasing gold ornaments at auspicious events is very common in India, but buying physical gold may not always be the best decision, no matter how good the investment option is. 

 

So what do you do?

 

Make way for digital gold!

 

Let’s find out what digital gold is.

 

 

What Is Digital Gold?

 

It is an alternate way of investing in gold which is way more convenient. So, how does it work?

 

You can purchase digital gold online and the company will buy the exact weight of physical gold and store it in a secured vault.

 

Now you may think, what’s the point? It’ better you buy it yourself. But think of how much effort you’re saving? Not to mention the safety angle.

 

There are reliable companies through which you can invest in digital gold and you don’t have to worry about the quality. Trustworthy companies usually buy 99.9%, 24 carats of pure gold.

 

Not only is the purchasing, but the selling of gold is also done online and only at the market price.

 

And imagine how easy the process is! You only need a phone and a good internet connection to start your investment journey..

 

The best part is that investing in gold online doesn’t involve any extra storage cost. Also, all the transactions take place at the market price, so the transparency is phenomenal and one can safely think of investing in them. 

 

How Does the Process Work?

 

Digital gold is transacted through mobile or internet banking and that too at market rates.

 

The rate depends on various factors such as customs duty imposed, international gold price, exchange rate, etc. Since the price of gold keeps fluctuating, a limit of 5 minutes is imposed.

 

Therefore, one has to complete the transaction within 5 minutes. An OTP will come on your phone for a final confirmation. After that, the amount of digital gold you’ve invested in will be credited to your account.  As mentioned before, one doesn’t have to save a huge amount of money to invest in digital gold. 

 

8 Benefits of Investing in Digital Gold

 

Let’s check out some of the benefits of investing in digital gold.

1. Can be Done with a Small Amount

One can start investing in digital gold even with a very small amount of money. There is no restriction to buy a specific amount of gold. It depends on the buyer and how much they want to invest.

 

2. Purity of Gold

Companies that sell digital gold, only buy 24k gold for their customers. So you don’t have to compromise even when it comes to quality. It is also certified by government-licensed agencies. 

 

3. Can be Sold Easily

One can comfortably sell digital gold. Redemption can be done in the form of money, gold bars, or even coins. It depends on you and what exactly you want in return for your digital gold investment.

 

4. Can be Used Against Loan

Investors are allowed to use digital gold as collateral if someone wants a loan against it.

 

5. Safer Option

Digital gold is often considered as one of the safest options to store gold since it is placed securely in a vault and is also insured. So, one does not need to worry about the gold getting stolen. The responsibility to keep the gold safe and secure is the duty of the seller.

 

6. Diversify Your Portfolio

Investing in digital gold diversifies your investments portfolio. It is known as a great asset to amplify your savings.

 

7. Real-Time Rates

The digital platform will keep you updated about every minute rate in gold fluctuation. Thus, you can earn money by selling it at a higher cost. 

 

8. No Making Charges 

 

Gold invested digitally can be redeemed in the form of a coin or bar. Thus one doesn’t have to pay any unjustified making chargers and can even attain the purest form of gold feasibly. 

 

If an investor does not want to store gold physically, they can simply sell it online and the value of the gold will be transferred directly to your bank account, through a 24 hour market-linked rate.

 

 

Alternatives of Digital Gold

 

If your primary goal is to invest in gold, then options like gold mutual funds and gold bonds can also be considered. They are just another form of digitally investing in gold but here the transactions take place in the form of cash only.

 

Today, you can even consider investing in assets that are backed by gold! You heard it right. And although this investment option may not mean that you are directly investing in gold, you will still earn decent returns through it. However, these are high risk –  high return investment options.

 

These are considered superior alternatives to digital gold as lesser charges are imposed during transactions. In addition to it, gold bonds also pay interest to the amount that you will invest. Thus, one can generate passive income through investing in them.

 

 

Conclusion

 

Gold is an asset that is considered very pious and carries a legacy. It is not only an investment or a way to earn money, but it holds emotional and social value to Indians.

 

Almost every auspicious occasion includes buying gold. It makes the investment portfolio financially diverse and helps in overcoming inflation and currency risk.

 

Investing in gold also helps to keep up with the market volatility. So, it is a great option to invest in digital gold, secure your money, and use it whenever needed. 

 

Happy Winting!

2 thoughts on “Digital Gold – Meaning, Benefits and Alternatives

  1. How does this work for NRIs? Do we need a Deemat account to invest in Digital Gold? Can I use my Zerodha account for this purpose?

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