Gold has been a favourite investment instrument for many Indians due to its stability and intrinsic value. But with digital innovations transforming how we buy and store gold, “Digital Gold” has gained popularity as a modern alternative. Including Digital Gold, there are many other ways to invest in gold online, like through Gold Exchange Traded Funds (ETFs), Gold Mutual Funds, Sovereign Gold Bonds (SGBs), Gold Futures, and more.
In this blog, we will be exclusively talking about Digital Gold and its top 5 advantages to help you understand whether it will be a good fit for your investment portfolio.
What Is Digital Gold?
Digital Gold is gold that you can buy in small fractions through digital platforms, like Koshex. When you purchase Digital Gold from a trusted partner, the company buys it on your behalf and stores it under your name in a safe vault. It is a facility that allows you to invest in gold from the comfort of your home.
Digital Gold is similar to physical gold in most ways. The difference is that you can buy, sell, and transact it using technology. Moreover, it is better than buying jewellery as the making charges tend to reduce the value of gold that you buy from jewellers.
Due to these reasons, Digital Gold investments are gradually beginning to emerge as one of the most popular investment choices for new-age Indian investors.
Also Read: Digital Gold vs Mutual Funds: Which Is The Better Investment?
Here are five of the major advantages offered by Digital Gold to investors.
1. Digital Gold Is Easily Accessible
One of the biggest advantages of Digital Gold is its accessibility. Buying physical gold involves visiting a physical store, careful scrutiny, and payment in cash or card. On the other hand, you can buy Digital Gold in just a few clicks from the comfort of your home. Through investment platforms like Koshex or digital wallets, you can buy gold in small or large quantities. Most platforms would allow you to buy Digital Gold for as low as ₹1 in India. This flexibility helps investors to buy gold instantly anytime and anywhere.
Here’s how you can easily buy Digital Gold through the Koshex app:
- Download the Koshex app.
- Create a free account, and
- Purchase gold by paying online.
Koshex has partnered with leading gold-selling platforms, which will then hold the equivalent quantity of physical gold on behalf of the investor. This accessibility makes Digital Gold a viable option for newbie investors who prefer the convenience of online transactions.
2. Digital Gold Comes With No Storage Worries
Physical gold comes with the obvious concern of storing it safely. Whether it’s gold jewellery, bars, or coins, you often need to pay to keep them in secure lockers or vaults to make sure they are safe. These storage fees can become expensive over time. Digital Gold removes this worry completely by allowing you to own gold without needing to physically store it somewhere.
When you buy Digital Gold, the equivalent amount of physical gold is stored in insured vaults by the service provider on your behalf. These vaults are managed by reputed custodians, ensuring your gold is both safe and insured. This convenience reduces risk, especially for those who live in areas where secure storage might be limited.
Moreover, Digital Gold also makes your assets less prone to theft or misplacement since the gold is neither kept at your home nor is it personally held by you.
Also Read: How long can I hold Digital Gold?
3. Digital Gold Provides Flexible Investment Options
Digital Gold’s flexibility extends beyond accessibility and storage. It also provides the chance to invest in tiny increments. Unlike physical gold, which you need to buy for a certain amount, Digital Gold allows you to invest as much or as little as you like. You can buy Digital Gold for as low as ₹1, making it a great entry-level investment option.
On top of that, Digital Gold offers the option to buy specific weights or monetary amounts, depending on your financial situation. This fractional investment capability allows many investors to add gold to their portfolios. It also gives seasoned investors the freedom to allocate incremental amounts when rebalancing their portfolios.
4. Digital Gold Is Highly Liquid & Easy To Sell
Liquidity is important in any investment, and Digital Gold provides excellent liquidity without the hassle. Selling physical gold often requires visiting a jeweller, haggling over the purity and weight, and potentially facing deductions or charges. However, with Digital Gold, selling is a quick and seamless process. Most platforms, like Koshex, offer the option to sell instantly at live market rates, and the proceeds will be credited directly to your bank account.
Additionally, the value of Digital Gold is directly tied to the current market rate of gold. This ensures that you get a fair price whenever you decide to liquidate your holdings. Hence, Digital Gold offers a level of financial flexibility that’s especially useful during times of urgent need or sudden financial requirements.
This may make you wonder whether Digital Gold and Gold ETFs work the same. The answer is that they don’t. Gold ETFs require a Demat account, which may not be suitable for a broader audience. On the other hand, Digital Gold doesn’t need any Demat accounts and you can start investing in them immediately.
Also Read: Selling Digital Gold A Step-By-Step Guide
5. Digital Gold Can Be Easily Converted Into Physical Gold
One of the biggest advantages of Digital Gold is that, unlike other virtual assets, it can be converted into physical gold. This is suitable for investors who may wish to hold onto the metal for cultural, personal, or legacy reasons. Most platforms allow you to convert your digital holdings into gold coins, bars, or even jewellery. This can then be delivered directly to you or picked up at a nearby partner outlet.
The process of converting Digital Gold into physical gold is pretty straightforward. All you need to do is select the quantity you want to convert, complete any additional formalities, and the service provider will arrange for the physical gold. Many platforms even partner with jewellers, allowing you to redeem Digital Gold for jewellery at partner stores. This dual nature of Digital Gold – as both a liquid asset and a convertible one – is a major advantage, especially for those in regions where gold is culturally significant or serves as a long-term wealth-preserving asset.
Also Read: Can I Convert Digital gold To Physical Gold?
Additional Advantages To Consider
Apart from the top five advantages of Digital Gold, here are some additional benefits of the yellow asset.
Security & Transparency
Digital Gold providers ensure a high level of transparency and safety. Reputed platforms often share live rates and are backed by strict auditing practices.
Ideal For Gifting
Digital Gold can be gifted to your loved ones easily. It is also becoming popular among corporate entities, gift-giving platforms, and loyalty reward systems. This makes it a versatile choice for both personal and institutional use.
Top 5 Advantages Of Digital Gold – The Conclusion
Digital Gold is quickly becoming an easy way to buy, sell, and gift gold. By providing easy access, secure storage, high liquidity, flexibility, and the ability to convert into physical gold, Digital Gold truly is an instrument that offers several advantages for both new as well as seasoned investors.
As always, remember to do your due diligence and choose platforms with strong reputations, transparent practices, and robust security measures when investing in Digital Gold. Platforms like Koshex are ideal for you, as we strive to offer multiple investment instruments, like Mutual Funds and Digital Gold and protect your data with military-grade encryption. Create a free account with Koshex today and start your investment journey with Digital Gold.
Frequently Asked Questions (FAQs)
Are there any additional fees when buying Digital Gold?
Yes. There is a GST (Goods & Services Tax) applicable to the purchase of gold. Also, some platforms may charge a fee for storage, insurance, and administrative purposes.
Can I buy Digital Gold for gifting purposes?
Yes. You can buy Digital Gold to give it as a gift to others, making it a unique and valuable option for special occasions.
Can Digital Gold be used as collateral for loans?
Yes. Some financial institutions accept Digital Gold as collateral for loans.
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