“I want to keep aside some gold for my children’s future & my own security.” Many women feel this way about investing their extra savings every month. After all gold is not just an investment for us – it is an emotion. An emotion which finds a place in our rich culture, our sense of status, every festival or special occasion in the family and, invariably in our bank lockers.

For decades, women have invested in gold as their most preferred asset – either as jewelry or gold coins/bars. It is no surprise then, that India is the second largest consumer of gold in the world.

However, with changing times, it is obvious that our investment preferences would also change. Now, with technology impacting every part of our life, it is no different for investing in gold. So, physical gold meets technology – enter, the new star on the block, Digital Gold.

What is digital gold exactly?

Digital gold is an alternative to buying physical gold. Digital gold is gold which can be bought easily online, which is stored, in our name, in a locker provided by a third-party.

So, instead of buying physical gold like jewelry or coins from a gold jeweler & then, keeping it in your bank or home locker for safety – digital gold gives us the convenience of buying from our phone/laptop at the click of a button & not having to worry about storing it for safety.

There are 3 main sellers of digital gold in India – MMTC PAMP, Augmont Gold and Digital Gold India Pvt. Ltd. (brand name Safegold). They offer digital gold through their online partners like e-wallets (PhonePe, GooglePe, PayTM, etc.) or third party apps like Salt, Jar, Tanishq, Kalyan Jewellers, etc.

Digital gold is 100% hallmarked and certified 24K gold with 99.9% purity, which means, not only is it easy to buy or sell & convenient to store, it also comes with high authenticity and transparency.

In short, digital gold is a convenient, transparent and low-cost way to start investing in gold. What’s more, digital gold can later be converted into physical gold or exchanged for jewellery from your favorite jeweller.

Learn more about all available gold investment options, features and how they compare in our Gold Investing Course.

Is it better than physical gold?

While there are considerable advantages of ease, low cost and authenticity in digital gold, one must choose based on their own personal needs and preferences.

Here are some of the advantages it enjoys over physical gold:

• Lower minimum price to purchase (as low as Re.1)
• No issues of theft – 100% secured vault for storage of gold in our name
• No worries about purity of gold – certified & hallmarked 24K, 99.9% purity
• Price transparency while buying and selling – unlike different rates by different jewellers in different regions
• Quick & easy to liquidate 24/7
• No paperwork required below a certain investment amount (no demat account, etc.)
• Lower charges – jewellery comes with making charges upwards of 10-12%, while coins also charge ~7.5% ; whereas while buying digital gold, costs of 3.5-4% would be incurred as transaction charge

While for some of us the feeling of holding, touching, wearing physical gold cannot be replaced, for the ones who do not have those emotions, digital gold would be a more practical option.

Physical gold must be kept safe, and it can only be purchased with a minimum value.

But not everything is rosy – Must know facts before buying Digital Gold

1. No regulator

Last year, Securities & Exchange Board of India banned brokers from selling digital gold since it is not regulated by SEBI. Currently, digital gold is not under any regulations, which implies that there is no check on the actual purchase or holding of the gold bought. While the three major sellers have highly secured vault providers (Eg. SafeGold has partnered with the global market leader in vault services Brink’s). Incase of bankruptcy of these 3 sellers, the Custodian shall take over and settle the claims of the investor.

2. Not totally free

Apart from GST of 3%, there are transaction charges levied by the platform which could be between 3-4% and must be accounted for before comparing options

3. Storage not free forever

There are no free meals (atleast, not forever!). Similarly, while the first 5 years storage is offered free of cost, thereafter, most of the sellers shall charge a certain fee. The fee amount differs for each provider – might be a good idea to check the same if you are buying for a long-term. Once the free storage time period is over, one can either continue by paying the charge or sell the investments or take delivery in the form of coins or jewellery

4. Charges on taking delivery

At the time of converting digital to physical gold, one cannot escape the making charges. There would be delivery charges as well to securely get you your desired product delivered to your home. Remember, these are only applicable if one takes physical delivery. It might be cheaper to sell the digital gold & thereafter buy jewellery from a trusted local jeweller at the time when needed.

Where can I buy Digital Gold?

Digital gold can be easily purchased through e-wallet platforms like GooglePe,PhonePe, PayTM or through jeweller platforms like Tanishq, Kalyan Jewellers. There are also new-age fin-tech apps like Salt, Jar which offer digital gold with a seamless experience for the user – providing details of the purchase through a dashboard.

One can also directly buy from the website of SafeGold, MMTC-PAMP or Augmost gold.

For a small amount (under 2L), no documents need to be submitted. Above that full KYC (know your customer) process will be required.

Many of these platforms have started some innovative solutions like

•  Monthly investment options to bring discipline in investing
•  Gifting feature, which might be worth exploring to share the gift of wealth with loved ones on special occasions

Which is better for me – physical or digital gold?

Which form of gold is suitable for you, really depends on your need and preferences.

Ask yourself these 5 questions to help you decide

1. Do I love to hold, touch, see, wear gold?
2. Do I find it convenient to keep it safe (E.g. Have a locker of my own)
3. Can I purchase minimum 1 gram of gold i.e., approx. Rs.5000?
4. Do I want to consume it right now?
5. Am I aware & comfortable with the making and breaking charges?

If your answer is mostly NO to the above questions, digital gold might be more suitable for you.

Just like a single diet plan does not work for everyone, choosing investments which are right for us requires a deeper look into our own financial health and choices.  

Similar to choosing any investment product, choosing what is the right gold investment product for you is based on your risk profile, your preference, and your own analysis. One could also consider dividing the investment amount between both the options, such as keeping coins for short-term goals and digital gold for longer-term goals.

Still confused on which Gold Product to choose? Take our GOLD PERSONALITY QUIZ to check out the products which suit your personality the best.

At Womoneysta, our endeavour is to have more women take charge of their financial decisions. Explore our courses which are curated to be jargon-free, practical and unbiased. Our team of experts suggests taking an overall view of your financial plan, and then deciding if digital gold fits into your overall asset distribution model, and works for you as a product. Book a slot for your free 15 minutes discovery call with a Womoneysta coach today.