What is Digital Gold?

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Digital gold is a new-age version of buying gold through online channels. You can buy 24k Pure Gold Online with the assurance of gold purity, maintenance & storage safety.

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It is a more convenient and cost-effective alternative for those who want to buy gold and start their long-term gold investment journey from anywhere on the planet.

Digital gold is nothing but a gold investment in virtual form. Let’s consider the following case:

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Suppose I am thinking of buying gold. But I don’t have a personal jeweller of whom I have been a regular customer. Therefore, I visit a jewelry shop near my home and ask for 10 grams of gold. He charges Rs. 54,300 for 10 grams. I take the gold and get back to my home. However, when I check the gold price, it is Rs. 49,500.

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Anguished, I revisit the jeweler to inquire about the same. He says that this is due to making charges and all that. While gold commodities usually involve certain making charges, I have not been aware that it would be this high. Further, I am also concerned about the purity of the gold I purchased.

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The next day, I read in the newspaper about the burglary in a nearby house. As I was worried about the gold I purchased, I decided to keep it in a bank locker. I went to my bank and inquired about the locker charges.

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For small lockers, they quoted Rs. 3000 annually, whereas, for medium lockers, the rent was Rs. 6500 annually. I went for the smaller one and decided not to invest much in gold.

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That’s the reason why people are parting ways from physical gold investment to invest in digital gold.

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How Does Digital Gold Work?

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We can invest in digital gold through various online platforms. In India, the following are the primary digital gold providers:

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MMTC-PAMP India – It is a joint venture of the Metals and Minerals Trading Corporation of India (MMTC) and MKS PAMP. While the Indian Government owns MMTC, MKS PAMP is a Swiss company.

Augmont Goldtech - Digital Gold India, through its SafeGold brand

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These providers allow investors to invest in digital gold directly or through tie-ups with various third-party investing platforms. Therefore, when we invest in digital gold through any of the platforms, we buy digital gold from any of the above three providers.

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These providers purchase an equivalent amount of gold and store it in insured and secured vaults. The investment is made in 24-karat pure gold. Thus, the money we invest in digital gold is actually gold without the hassle.

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• Purchase & Possession 

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Investors can buy and own digital gold through online platforms like fintech companies and apps. 

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These apps and companies tie up with reliable and reputed mediators like Augmont Gold Ltd, Digital Gold India Pvt. Ltd. - SafeGold, and MMTC-PAMP India Pvt. Ltd.

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• Storage & Security

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Once you’ve completed your purchase, your digital gold is stored in a bank-grade secured vault. 

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Jar App is backed by SafeGold which assures that your digital gold is safely stored and offers guaranteed security.

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• Real-time pricing

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Most digital gold platforms provide real-time pricing for users' awareness. Digital gold prices are affected by global gold trends. 

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This is to ensure that the investors get real-time updates regarding the price of digital gold. 

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• Flexibility

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Purchasing digital gold is the most affordable way to buy gold. Investors can purchase or invest in digital gold with as little as ₹10. 

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Platforms like the Jar App offer convenience and flexibility to investors. Through the app, you can set up autopay or opt to invest manually in digital gold.

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• Conversion: 

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Many financial institutions and fintech companies that deal in digital gold provide an option to convert your digital gold investment into physical gold. 

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This allows investors to convert their savings into physical gold which they can use for themselves or gifting purposes. 

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You don’t need to pay heavy making charges while converting your savings into physical gold. However, the companies do levy a small management fee. 

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Features of Digital Gold

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Digital gold offers various features, making it a lucrative investment option for us. These include the following:

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While we can buy and sell digital gold anytime, anywhere, in just a few clicks, we should go through the terms for selling the gold. Some providers may allow the selling only when the selling window is open. Different providers may have different terms when it comes to selling digital gold. But in most cases, digital gold investments are highly liquid.

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While the gold is stored in secured and insured vaults, we don’t have to pay any insurance or locker charges.

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No need to visit any jeweller to buy or sell gold. We can do everything at our convenience by just sitting at home.

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We don’t need to worry about the purity of the gold, as we saw in the above example. We need to decide when to enter and exit regarding digital gold investments. The investments are made in 24-karat gold.

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As gold is one of the safest investment alternatives, digital gold is a great way to reduce the overall portfolio risk of investors.

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How to Buy Digital Gold in India?

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There are many ways to buy and invest in gold in India. Earlier, purchasing physical gold was the only way to own gold. 

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However, in the past two decades, purchasing gold has changed dramatically.

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Physical gold vs digital gold:

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Advantages & Disadvantages of Digital Gold:

Let’s take a look at some advantages and disadvantages of investing in digital gold.

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Considering the easy liquidity, purity, safety, and delivery options, even the disadvantages of investing in Digital Gold don’t seem so bad and it is a better option from an Investor's point of view when comparing it with buying physical gold such as jewellery.

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Taxability of Digital Gold

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Capital gains from the sale of physical gold are taxed based on whether it is short-term or long-term capital gains.

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If you sell your gold assets (which may be gold jewellery, digital gold or coins) within three years from the date of purchase, any proceeds from that sale will be considered Short-Term Capital Gains(STCG).

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Risks Related to Digital Gold

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Like most investment options, digital gold also carries some risks. It is important to understand these risks before investing or purchasing digital gold. 

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1. Technological Risks

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Since the digital gold transaction completely takes place online, it carries some technological risks. 

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Investors may be prone to technical issues such as network outages, system failures, and cybersecurity concerns. 

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2. Regulatory Issues

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India has yet to define a regulatory framework for regulating the sale and purchase of digital gold. 

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Investors are advised to carry out due diligence before investing in digital gold through any entity or platform. 

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3. Price Transparency

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It is important to carefully read the terms and conditions provided by the company or platform before investing in digital gold. 

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Some companies may levy hidden charges that you may have to accrue during the sale of digital gold via their platform.

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Frequently Asked Questions

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1. Is it safe to buy gold online?

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Purchasing gold online may be risky but the Jar App offers a safe and secure platform for investors. 

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The app is powered by SafeGold and supports all major UPI apps like GPay, Paytm, PhonePe, etc. 

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You can also check out our gold investment calculator to get an estimated return according to your investment plan.

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2. How can I buy gold digitally?

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There are various methods to purchase gold online such as investing in Gold ETFs, SGBs, Gold Mutual Funds, and Digital Gold. 

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3. Is buying digital gold a good investment?

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Digital gold is similar to purchasing physical gold. However, digital gold guarantees 99.9 purity in 24kt gold.

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It is stored digitally which means there are no charges for lockers and insurance. 

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4. Are investment apps safe to buy gold?

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Yes, most investment apps are safe to buy gold online. 

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However, investors must carry out their due diligence and familiarize themselves with all the terms and conditions before investing or purchasing digital assets.

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5. What if you lose your smartphone, will your Gold disappear?

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Nope! Just like stocks from the share market, digital gold is also registered in your name. 

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It is stored securely in vaults insured and verified by an independent trustee. This ensures the safety of your gold, even if the app you used to buy gold from, disappears!

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6. Is Digital Gold Costly?

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No, Digital Gold isn't costly compared to physical gold as it doesn't include making charges or wastage charges as it is not made yet. It is 24k 99.9% pure gold kept in the safe locker.

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You can buy digital gold for just ₹10 from the Jar App and start your Digital Gold investment journey.

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7. What is the Digital Gold Price today in India?

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You can download and install the Jar App to get daily reminders on current digital gold prices and automate your investments as well.

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You can also visit our Live Digital Gold Price page to know the live price of digital gold and start your daily savings journey.

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