For decades, generations, gold has been a valuable asset. With gold prices rising by the year and its demand not showing any slow down, there have been multiple options available in the market to buy gold apart from physical coins or bars. 

What Is Digital Gold? 

Merging the best of two – digitization and gold, few companies in India are now offering digital gold. Digital gold lets users invest in this coveted asset without having to incur the liability of storing it.  

Should You Buy Digital Gold? 

Digital gold in comparison to traditional gold is available to purchase online and also through popular digital payment platforms such as Amazon pay Switching from traditional brick purchase methodology to trusting the new-age digital gold opportunity. Should you invest? Before you make that decision, read on to find out the risks involved in buying digital gold.

Pro: You don’t have to worry about storing digital gold. That is definitely cost effective in comparison to physical gold that incurs vault storage costs. 

Risk: There is no regulating body defined for digital gold investments. When you purchase gold through this medium,t gold is stored and maintained under your name by the purchaser. Trustee monitors the purchase; however there are no predefined policies, rules and regulations, a trustee is required to follow. An auditor, also appointed by the purchaser, does the auditing of this gold. Unlike gold ETFs, that are monitored by SEBI, in the case of digital gold there is no governing body protecting investors’ gold purchase.  

Pro: You can purchase digital gold as little as one rupee and conveniently in the comfort of your home.

Risk: This competitive advantage comes at a price point. You need to pay holding charges for storing the gold. Additionally you also pay the GST at 3% for which no input tax is credited. 

Pro: Bring home the bars when you want them. You can easily transact and encash the gold into coins and bars, when you need and want to.

Risk: You can only hold the gold digitally for a specified period. Once the term matures, you need to convert and take delivery of your digital gold into your preferred mode of gold. You can also choose to sell it. But you can no longer retain it digitally. 

Pro: You are in control of your investment

Risk: As soon as your investment matures or you choose to take delivery, you will have to incur additional making charges to convert it into physical gold and logistics fee for the delivery.