Gold has traditionally been regarded as one of many households’ most reliable investment options. However, the numberone limitation of this metal was that it was impossible to purchase actual gold in extremely small amounts until the concept of digital gold was introduced.
Digital gold allows investors to buy, sell, and accumulate small quantities of gold online without the requirement of actual possession. This new form of gold ownership effortlessly combines history and technology. This novel approach to gold ownership has numerous advantages, making it an appealing alternative for experienced investors and newbies.
This blog will give you an in-depth overview on investing in digital gold, highlighting its numerous benefits.
What is Digital Gold?
Digital gold means owning physical gold in electronic form. While physical gold is valued for its tangibility, digital gold offers the same value in a more accessible and flexible format. When you invest in digital gold, you’re essentially purchasing a specific amount of gold stored securely in a vault, with ownership details recorded digitally. This provides unparalleled convenience and accessibility compared to traditional physical gold investments.
Digital gold can be purchased online and held in insured vaults by the vendor on behalf of the consumer. It also helps us overcome all the problems associated with actual gold purchasing. With Internet/mobile banking, you can invest in gold digitally anytime and anywhere.
Top Perks of Digital Gold
The introduction of digital gold investment has made it even easier for individuals to join in this new-age investment opportunity.
Digital gold lets investors buy and sell gold, even in small amounts using online platforms or mobile applications. We will explore the digital Gold investment advantages or benefits associated with it.
Convenience
Digital gold provides a unique benefit for investors. You may buy or sell gold at any time, from any location, with very few clicks on your laptop or taps on your phone. This accessibility allows you to easily manage your gold investments while fitting into your hectic lifestyle.
Cost-Effective
Digital gold is often less expensive than traditional gold investments, which frequently include high fees and markups. You can eliminate charges like storage fees, insurance prices, and dealer rates, eventually increasing your profits. Furthermore, internet platforms frequently offer low pricing and transparent fees, ensuring you receive the best value for your money.
Fractional Ownership
Digital gold allows investors to own fractions of gold, allowing them to invest even if they do not have the finances to purchase an entire ounce or bar. This fractional ownership makes gold investment available to a broader spectrum of people, including those with limited funds.
High Liquidity
Digital gold investments have high liquidity, which means that investors can swiftly convert their holdings to cash.
Online platforms make it easy for investors to sell gold and withdraw funds, allowing them to profit from price swings or satisfy immediate financial demands.
Security & Transparency
Digital gold platforms focus on security and transparency, using powerful encryption techniques to protect your investment and personal data. Furthermore, transactions are recorded on a blockchain, which ensures transparency and accountability because each transaction is verifiable and traceable.
Real-time pricing
Digital gold platforms offer real-time pricing information, allowing investors to make informed selections based on market conditions. This function allows investors to capitalize on positive market movements and make timely portfolio modifications. Real-time pricing is an essential component in the world of investments, and digital gold puts this vital information at the fingertips of any investor.
Accessibility
One of the major advantages of investing in digital gold is its accessibility and convenience. For instance, when you buy physical gold, it demands proper storage and security measures. But digital gold can be purchased in digital forms on the online platforms and managed according to the investment strategies.
No storage hassles
Digital gold does not require the trouble of storage, unlike physical gold, that needs to be stored carefully and insured against loss or theft. You don’t have to worry about finding a secure place to store your gold or paying for insurance because the platform handles everything.
Tax efficiency
Investing in digital gold may be more tax-efficient than purchasing physical gold. Depending on your jurisdiction, you may be eligible for lower capital gains taxes or tax-deferred growth on your investment, which will increase your overall return.
Hedge against inflation
Gold has long been regarded as a hedge against inflation as its value rises during economic instability or currency depreciation. Investing in digital gold protects your money from the eroding impacts of inflation while preserving your purchasing power over time.
How to trade in digital gold?
You can visit platforms like Gullak, Groww, Paytm, HDFC Securities, G-Pay, or Motilal Oswal to invest in digital gold. Once on their platform, follow these steps:
Account Creation and KYC: Begin by creating an account and then complete the KYC (Know Your Customer) process to verify your identity.
Choose the Amount: After setting up your account, enter the desired amount in INR or grams. You can buy gold for a fixed value or by weight at the live market rate.
Select Payment Method: Complete the KYC process and get your preferred payment method, such as a bank account, card, or digital wallet.
Secure Storage: Your purchased gold is securely stored in a virtual locker, with your account instantly updated and accessible 24/7.
Sell Options: You have the flexibility to sell your digital gold whenever you want directly through the platform.
Physical Delivery: If you prefer physical ownership, some platforms offer the option to request doorstep delivery of your gold in coins or bullion.
While gold remains valuable to investment portfolios, options like Sovereign Gold Bonds and Gold ETFs may offer more advantages than digital gold.
Sovereign Gold Bonds provide an additional 2.5% interest, making them suitable for long-term portfolios. However, they are less liquid. On the other hand, Gold ETFs, regulated by SEBI, offer liquidity, making them preferable for short-term hedges.
As Digital Gold evolves, with investment limits and regulatory oversight, it may become an attractive option for investors seeking exposure to physical gold.
