Digital gold service providers like Gpay, Phonepe and broking firms like Paytm Money, HDFC Securities, Motilal Oswal, etc allow investors to buy gold in small amounts to incrementally build gold holdings. Buyers can sell or convert it to physical gold – like coins and ingots – whenever they want.
Like the term suggests, ‘digital gold’ is an online product which enables you to hold gold virtually without owning a safe or bank locker. The seller keeps an equivalent weight of physical gold in a secure vault for each online buy. There are no minimum purchase limits, so you can buy for as less as Rs 100.
Key Features of Digital Gold
1. Safety Guaranteed
Unlike physical gold, it is virtually bought and you don’t have to worry about theft or expensive locker fees.
2. Sell anytime from home
Sell anytime, without going anywhere and receive money directly in your account.
3. Convert to Physical Gold
You can convert your digital gold to physical gold anytime in the form of jewellery in our store or our website.
4. Buy as low as ₹100
Digital gold does not require a large sum of money for buying. You can buy based on your budget
Where you can buy
Digital gold service providers like Gpay, Phonepe and broking firms like Paytm Money, HDFC Securities, Motilal Oswal, etc allow investors to buy gold in small amounts to incrementally build gold holdings. Buyers can sell or convert it to physical gold – like coins and ingots – whenever they want.
Options to Avail Digital Gold
- Take physical delivery of the gold
In case you chose to not sell the gold, you can request for a doorstep delivery of your gold in the form of coins or bullion. Note: Delivery fees are applicable.
- Sell whenever you want
You can choose to sell your gold digitally itself to MMTC-PAMP whenever you want.
- Gift to your Friends & Family
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Who is offering Digital Gold?
In India, digital gold is primarily sold by three entities—MMTC PAMP, Augmont Goldtech and Digital Gold India (SafeGold). These firms have tied up with service providers like PayTM, Google Pay, Amazon Pay and PhonePe, among others, to sell digital gold via their platforms. Lately, jewellers like Tanishq, Senco and Kalyan Jewellers have also started offering digital gold through similar tie-ups. Customers can open digital gold accounts with the refiner directly or through any of the partner platforms.
How Digital Gold Works?
- Enter an amount in INR or grams – You can buy gold of a fixed value or weight at live market rates.
- Choose your payment method – Pay through your preferred online payment option such as UPI, cards, or netbanking.
- Your gold is now in a vault secured by MMTC-PAMP – Your account is updated instantly, and can be accessed 24/7.
Advantages of Digital Gold
- Storage: You don’t have to pay bank locker rent, insurance cover or additional investment of Fixed Deposit (FD). Sellers say the digital gold is stored in an insured, secured vault at no extra cost.
- Investment convenience: You can start with even Rs 100, and build up your holding over time. Investment in physical gold requires a lot of money.
- Uniform price: The price of physical gold varies from city to city and jeweller to jeweller while digital gold prices are the same across the country. Physical gold carries high making charges; digital gold has just the 3% GST.
- Purity: Sellers point out that digital gold investment is made in certified 24 Karat, 999.9 pure gold. Ascertaining purity of physical gold attracts additional cost.
- Sell or Redeem: Digital gold can be sold or redeemed at the click of a button. You can sell the digital gold instantly and the value of your gold is instantly transferred into the bank account through a 24×7 market-linked rate. If you want to redeem your holding, the physical gold will be delivered at your doorstep.
- Instant Liquidity: You can sell digital gold instantly, while physical gold can only be exchanged or sold through a jeweller, or sometimes several jewellers.
- Collateral: Digital gold can also be used as collateral for taking loans.
Disadvantages of digital gold
- GST on digital gold – When you buy digital gold, you need to pay 3% goods and services tax (GST) just like in the case of buying physical gold.
- Lack of an official government-run regulating body such as RBI or SEBI.
How is it better than buying Physical Gold?
It essentially facilitates holding gold virtually without owning a safe or bank locker. So you don’t have to worry about storage and security. Digital gold investment is made in certified 24 carat, 999.9 pure gold held in the vaults of the custodian. Physical gold often faces issues of impurities. Further, buying physical gold entails high making charges. A digital gold account comes at no cost apart from 3% GST. The digital gold price is the same across India, therefore you can buy and sell gold online at fully transparent, live market rates. You can also sell your gold digitally back to the platform whenever you want without facing any deductions. Most platforms provide the benefit of doorstep delivery of the physical gold at a small cost, if redeemed in this form. Besides, digital gold allows purchase in much smaller denominations than actual physical gold.
How safe is it?
The entities who actually sell digital gold serve as custodian of your accumulated gold, whether you buy directly or via any partner platform. A trustee is appointed to oversee quality and operation of vaults. At no point does the ownership of your accumulated gold transfer to either the partner service provider or the custodian.
The physical gold is stored in secured vaults that are fully insured for any eventualities loss due to theft or damage caused by natural disasters. However, customers do not have the option to go and inspect if it is actually backed by physical gold.
Currently, digital gold is not directly under the purview of any regulatory body. So there is an element of risk as rules are not yet in place to govern this new arena. With rising popularity of this product, the amount of gold stored in vaults is also rising at a fast clip. However, Sebi is expected to introduce norms for digital gold very soon. It recently barred brokerage platforms from offering digital gold.