BAJAJ BROKING
November 25, 2024
8 mins read
Digital gold investments are emerging as a very common form of investment in recent days. With these investments, you don't even need to physically hold the gold. Instead, you store it digitally. And you enjoy benefits like better liquidity, convenience, and ownership rights for your investment fractions. Digital gold investments are a flexible type of investment that allows you to sell or buy your asset at any time you feel. It is not a replacement for physical gold but an easy alternative allowing investors to easily hold, store, and access such valuable assets. You hold everything at your fingertips without worrying about physical theft, and much more.
Now before we delve deep into how to invest in digital gold. Let's first understand the basics and see what digital gold is.
Gold has always been one of the most popular forms of investment for quite a long time. However, earlier, individuals were engaged in the investing and trading of physical gold. With physical gold, you need to have access to physical assets that can be felt and touched, like jewellery, gold bars, etc. However, the time has very much changed now. In this technologically advanced world, investors are now able to invest in digital gold. Here, everything is at your fingertips. You can buy or trade your digital gold via online platforms. You need not have to physically hold these assets, but you enjoy their liquidity, value, and convenience.
Now that you know what digital gold is, let's move ahead. Let's see what makes it an attractive option and if it is something you should consider investing in.
Buying digital gold is a convenient way to invest in this precious metal without worrying about physical storage. If you’re wondering how to buy digital gold or eGold, follow these simple steps:
Step 1: Select a Reliable Digital Gold Provider
Choosing a trustworthy platform is crucial when investing in digital gold. Look for reputed names with transparent pricing, secure transactions, and clear terms. Verify if the provider partners with recognised vault managers and insurers to safeguard your gold. Checking customer reviews and platform certifications can help you make an informed decision.
Step 2: Sign Up and Set Up Your Account
After selecting a platform, you need to register and create your account. Provide your basic details such as name, email address, and mobile number. You may also have to complete KYC verification by submitting documents like your Aadhaar card or PAN card. Set up your preferred payment options for future transactions.
Step 3: Add Funds to Your Wallet or Account
To start purchasing, you must fund your wallet or linked account. Use available payment methods such as UPI, debit card, credit card, or net banking. Many platforms have a low minimum deposit requirement, making it easy for you to begin with small amounts and increase your investment gradually.
Step 4: Purchase Digital Gold Online
Once your account is funded, you can buy digital gold easily. Decide how much gold you want based on either value or weight. Review the live gold rate shown on the platform before confirming your purchase. After the transaction is complete, your account will reflect the updated gold holdings.
Step 5: Monitor Your Gold Holdings
Tracking your investment is important to maximise returns. Most platforms offer user-friendly dashboards where you can view your gold balance, monitor live gold prices, and review your transaction history. Regularly checking your portfolio helps you stay updated and make timely investment or selling decisions.
Step 6: Liquidate Your Digital Gold When Needed
Selling your digital gold is hassle-free. Log in to your account, select the quantity you wish to sell, and review the offered price. Once you confirm, the sale amount is credited directly to your registered bank account or wallet. This provides flexibility and quick access to your funds.
Step 7: Opt for Physical Gold Delivery (If Desired)
If you prefer holding physical gold, you can redeem your digital gold into coins, bars, or jewellery. Choose the product you want, pay any applicable making or delivery charges, and get it delivered to your address. This option offers the convenience of investing digitally and owning tangible gold when needed.
Learning how to buy digital gold is essential because investing in eGold offers the following benefits:
● Accessibility: You can start investing with as little as ₹10, making it a practical option for anyone.
● Security: Every gram you buy is backed by real, physical gold, stored safely in professional vaults.
● Flexibility: Buy or sell your digital gold whenever you want without worrying about fixed market hours.
● No Storage Hassles: You do not have to arrange lockers or worry about safety; your gold is stored securely for you.
As mentioned, investing in gold has been a long-followed tradition for several households in India. But does investing in digital gold make equal sense? Is it beneficial and if yes, how so? What are the benefits you may expect when investing in digital gold?
Here is a list of some of those common benefits, have a look.
Liquidity and Accessibility
With physical gold, it might be a hassle to buy or sell your assets, as it requires finding dealers and more. However, that isn't the case with digital gold. You can easily sell the same at any time. Making a transaction using digital gold investments is much easier and more transparent. Plus, they offer better liquidity, meaning they can be converted to cash whenever needed. Not to forget, you have these investments accessible to you at all times without the need to physically hold them. Thus, you have better control over your investments.
Convenience and Safety
Industry professionals also feel and suggest that investing in digital gold can be a good way to start where you don't need to have a large chunk of money to even begin. With digital gold, you can be involved in the sale and purchase of these assets, even in smaller amounts, at any time and any place. Thus, giving better convenience and flexibility to investors willing to start small. Further, digital gold investments are also preferred because of their safety aspect. Here, you don't need any lockers or security storage for the same. Instead, digital gold is stored in the security vault with regular audits attesting to their safety.
Low Investment Thresholds
As mentioned, with digital gold investments, you can start with smaller amounts, too. In addition to that, there are several cost benefits attached to digital gold. First, you save big on storage costs. Additionally, you also avoid other charges like making expenses, insurance costs, etc.
Transparent Pricing
Digital gold can be easily bought and sold after assessing the market prices. As mentioned, digital gold offers better transparency with simple and easy-to-make transactions. You may easily track the price online when you want to invest, thus making the whole investment more transparent and convenient for all investors.
Additional Read: What is Demat Account: Importance, Features and Types
If you are planning to invest in digital gold, using a few practical strategies can help you manage risks and optimise growth. It is important to approach your investments systematically, keeping in mind market movements and your financial goals. Here are some tips to guide you:
● Start with Small Amounts: Begin with smaller purchases to understand the platform’s features and price patterns.
● Set a Regular Investment Schedule: Consider investing a fixed amount every month to benefit from price averaging.
● Monitor Gold Price Movements: Keep track of domestic and international gold trends before making fresh investments.
● Diversify Across Platforms: Avoid putting all your investment into one platform. Choose two or more reliable providers to spread risks.
● Stay Within a Budget: Set a clear budget for your gold investments to avoid impulsive buying during price spikes.
● Plan for the Long Term: Treat digital gold as a medium-to-long-term investment instead of chasing short-term gains.
● Know the Charges: Be aware of storage, conversion, or delivery charges that different platforms may apply.
Now that you know the benefits of investing in digital gold, let's move ahead and see how to do the same. How to invest in digital gold? Well, several ways may help you invest. Here is a quick list of the available ways:
Gold ETFs
Gold ETFs are one of the most simple forms of investment. You may easily buy and sell them on the stock exchanges. With gold ETFs, you are supposed to buy a minimum of 1 unit to start trading. You can also invest in these ETFs via systematic Investment plans or SIPs.
These are types of investments where you invest in gold-related instruments. This also involves tracking the price of gold. Further, there may be management and other charges involved.
Sovereign Gold Bonds
Launched by the Government of India in 2015, Sovereign Gold Bonds are monitored and controlled by the RBI. These bonds serve as an alternative option for investors eliminating the need to hold physical gold.
Gold Futures
Similar to other future contracts, Gold Future Contracts also come with obligations where investors are supposed to buy or sell a particular quantity at a fixed price in the future.
One of the best things about digital gold investments is its digital storage. They are stored in a secure vault by the seller on behalf of an investor. Such storage also helps eliminate the hassle that comes with the storage issues of the physical gold. The vaults used for the storage of digital gold are highly secure and are managed and undergo regular audits from reputed institutions.
This ensures that you can easily secure your gold investments from physical theft or loss. Additionally, reputable and renowned gold platforms add an extra layer of security to your investments by adding control of financial authorities. The regulatory eye ensures everything goes according to industry rules and standards.
Any kind of market investment is not completely free of market risks and fluctuations. And digital gold is no different. Its value may fluctuate with the physical gold's price. Based on price changes and a few other factors, you may sell your digital gold at any time.
To exit your digital gold investments, you are offered two choices: you either choose the delivery of physical gold or you may sell your digital gold for cash.
When you choose doorstep delivery of physical gold, you just pay the making costs and get gold bars delivered to you for free. The other option is selling digital gold for cash. Here, you simply need to log in to your account, choose the amount you're willing to sell, and be done. You will easily receive the funds in your account.
However, before you exit your investments or make a selling decision for your digital gold investments, it is important to consider a few things. For example, understand the minimum quantity you can sell, read more on the ongoing selling price, negotiate prices, and see what payment settlements you're offered. This helps you choose where you would like your funds to be deposited after the sale.
As one of the trendy forms of investments these days, digital gold investment enjoys huge popularity. However, it is important to understand that they are very similar to physical gold when talking about taxation on digital gold gains.
Buying digital gold attracts tax regulations as per the income tax rules for gold purchases.
For selling digital gold investments, investors are required to comply with tax regulations of 20.8%.
For returns from digital gold, they are first classified into long-term capital gains and short-term capital gains. Long-term capital gains are held for 36 months and above. Alternatively, short-term capital gains are those which are held for a shorter time, which is less than 36 months.
For long-term capital gains, you are required to pay 20% tax on returns, plus the surcharge and 4% cess.
For short-term capital gains, you are not charged directly. However, you are taxed based on your income slab.
It is important to understand that there is no specific regulation or rule on sales and purchases of digital gold. However, it is a must to adhere to certain rules like KYC and other RBI regulations. So, before you start investing in digital gold, make sure you carefully read and follow these regulations.
Pros | Cons |
Easy to start with very small amounts | No central authority regulates the platforms |
Your gold is stored securely in certified vaults | Risk of operational lapses or platform issues |
Transparent pricing and purity assurance | Some platforms may charge storage fees after a certain period |
You can buy and sell anytime, offering good liquidity | Provider-related risks if the platform shuts down |
Before you decide to invest, weigh these points carefully. Think about your financial goals, how much risk you are comfortable with, and whether digital gold fits into your overall savings plan.
Digital gold is a popular investment choice, allowing investors to easily buy, sell, and convert their assets. They offer a variety of advantages like convenience, accessibility, transparency, and much more that makes them worth investing in. However, there are some risks, like the absence of governing authority, that are worth reading before making an investment choice. With digital gold investments, you may consider buying a reputable platform, starting small, and diversifying your portfolio for better benefits.
Happy Investing!
Disclaimer: Investments in the securities market are subject to market risk, read all related documents carefully before investing.
This content is for educational purposes only. Securities quoted are exemplary and not recommendatory.
For All Disclaimers Click Here: https://bit.ly/3Tcsfuc
Share this article: 
Digital gold is an investment platforms that allow investors to engage in the sale, purchase or even hold their gold digitally. With digital gold, you need to have them physically. Instead, you have to enjoy 24*7 accessibility.
Wondering how to invest in digital gold? Well, there are several ways to do the same. You may invest in digital gold via Gold Mutual Funds, Gold ETFs, Sovereign Gold Bonds, and more. You simply need to open your demat account, choose the products you want to buy, make the payment, and complete your investment.
There are several benefits of investing in digital gold. First, you have the flexibility to start small as there is no lower limit. Second, you do not have to hassle with issues of storage as digital gold is held electronically. With such storage, you also enjoy the benefits of security. Further, these are easily accessible, convenient, and offer better liquidity and transparency.
Just like other forms of investment, investing in digital gold also has certain risks. For example, there is no governing body. Additionally, storage limits may come into the picture with factors like rentals and more.
You can easily redeem your digital gold post the maturity period. You can simply get them converted into physical gold or cash, whatever best suits your needs and convenience.
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Investments in the securities market are subject to market risk, read all related documents carefully before investing. This content is for educational purposes only. Securities quoted are exemplary and not recommendatory.
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