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How Digital Gold Is An Easy Accessible Asset
The price of digital gold cost is something very similar across India, consequently you can trade gold online with complete transperancy at live market rates
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Gold is considered to be one of the valuable assets and always works as a safety net during tough times. It is not necessary to buy only jewellery, in fact, there are many options to buy gold nowadays. Gold and equities are inversely correlated.
Digital gold is a facility that brings you the opportunity to invest in pure gold digitally.
"Digital gold provides the same benefits as physical gold, but with reduced costs of purchase and storage, enhanced utility and added security. When a customer buys physical gold, there’s an additional making charge incurred, which ranges between 5 to 20 per cent of the gold’s value. This cost is eliminated while opting for digital gold", says Madhusudan Ekambaram, CEO of KreditBee.
Post the purchase of physical gold, customers need to pay particular attention to ensure gold’s storage and safety. This also means going for locker facilities, thus adding extra costs. With digital gold, there are no holding charges as the customers can hold it in their digital wallets and the provider holds it for them in a secure vault.
Further, there exists a hint of doubt and concern over the physical gold’s authenticity with purity differing from city to city as well as depending on the jeweler’s legitimacy. On the other hand, digital gold represents certified 24k gold of 99.99 per cent purity.
"While purchase of gold in digital form offers plenty of savings, its selling process also is hassle-free, as the customer can sell online, any-time at real time prices", Ekambaram adds.
There are several kinds of digital gold one can invest:
Gold ETF is a paper gold facility where one can buy gold in units like shares. To invest in Gold ETFs, one must need a Demat account. Its benchmark is the prices of gold in the bullion market. These are exchange traded funds, which can be bought in units on the stock exchange. There is no physical delivery of gold in this.
Gold Mutual Funds
Not only ETFs but gold mutual funds are also a good option. Investing in gold mutual funds is also easy. One can invest in Gold Mutual Funds directly through online mode or through its distributors. Gold Mutual Fund is an open ended investment product, that means one can sell it anytime on need. Demat account is not required for this. In this, the fund manager invests his corpus in Gold ETFs. One can also invest in Gold Mutual Funds through SIP.
Sovereign Gold Bond (SGB) is also a good option if you want to invest in gold. SGB ??is issued by the Government of India to invest in Gold Bonds. Sovereign gold bonds have a maturity period of eight years and a lock-in period of five years. If you hold the SGB till maturity, you will not have to pay any capital gain on the investment. Along with this, you also get an annual interest of 2.5 percent.
Nowadays many mobile wallets like Paytm, Google Pay, PhonePe also have the facility to buy digital gold. You do not need a lot of investment for this. You can buy as much gold as you want according to your pocket.
Apart from such options, comes the question of trust. So definitely everything comes with its pros and cons. One should always be careful about risks while investing on anything.
Ekambaram says, "There inherently exists a fear and risk of loss or theft of physical gold. Most digital gold providers insure the digital gold, which is already securely held on customers’ behalf by third party vault providers. The metal purchased is 24 karat gold, or 99.5 per cent pure, certified by government-licensed agencies, thus iterating the metal’s authenticity."
As India is towards digitisation in all aspects, the investment in digi-gold has hiked within last few years. Varied utilities of gold ranging from self-purchase, to investment and gifting purposes are also attracting consumers.
"Digital gold offers a nuanced and convenient way of buying and selling gold. Its high affordability and ease of access have led to its rapidly rising demand in the last few years. Traditional gold can be purchased in multiples of grams whereas digital gold can be bought in extremely small quantities, as low as Rs 100. Many providers offer a convenient SIP option as well for this", said Madhusudan Ekambaram, CEO of KreditBee.
He further added that there has been a 150 per cent increase in the amount of gold that is stored in vaults in the past one year, which indicates the growing popularity of the product. The high degree of convenience and affordability will certainly enable sustenance of digital gold as a product of multiple usage.