Digital gold is coming up as one of the most-favored investment instruments in recent days.
As there is no worry about storage and safety, digital gold is considered to be a good investment choice over physical gold. Here is a detailed guide on digital gold, how long you can hold it, and how it can benefit you.
What Is Digital Gold?
Digital Gold is just like regular gold that can be bought online. When you buy digital gold, the seller will store an equivalent quantity of physical gold in insured vaults on behalf of you.
Once you make the payment, you will get an invoice and the said quantity will reflect under the vault balance in your account with the service provider.
You can sell this gold at any time at live market rates, in either rupees or grams. You can also get the gold in physical forms like coins or ornaments, adjusted for any making charges and packaging costs.
When you compare physical gold with digital gold, the former comes with many non-refundable fees like making charges, storage costs, security risks, etc.
On the other hand, digital gold is more functional and considered a smart investment option.
Who Is Offering Digital Gold In India?
Some companies in India offer digital gold, including MMTC-PAMP India Pvt. Ltd, which is a joint venture between state-run MMTC Ltd and Swiss firm MKS PAMP. MMTC-PAMP India Pvt.
Ltd is internationally recognized as an industry leader for bringing global standards of excellence to the Indian precious metals industry.
They are the only LBMA (London Bullion Market Association) accredited gold refinery in India and their gold is accepted across global commodity exchanges and central banks.
MMTC-PAMP has partnered with Koshex to offer services to users to buy digital gold directly from them via Koshex’s easy and convenient platform.
Koshex is a one-stop solution for every Indian investor who is looking to invest in digital gold. You can buy, gift and sell digital gold from one place. You can also track and manage your investment in digital gold through Koshex.
How Safe Is Digital Gold?
The entities who sell digital gold serve as a custodian of your accumulated gold, whether you buy directly or through any partner platform.
A trustee is appointed to oversee the quality and operation of vaults. The physical gold is stored in vaults and these vaults are fully insured for any eventualities such as loss because of theft or damage caused by natural disasters.
How Long Can You Hold Digital Gold?
You can hold the digital gold that you purchased at a vault free of cost as a custodian for five years. Post that, you will have to pay a storage fee to the custodian if you don’t sell or redeem your holding.
If you hold the digital gold for less than 3 years, you will have to pay Short Term Capital Gain (STCG) tax.
If you hold the gold for more than 3 years, you will have to pay Long Term Capital Gain (LTCG) tax at 20% (with the indexation benefit), with cess and surcharge.
Advantages Of Buying Digital Gold
An investment in digital gold investment provides many advantages. Here are a few such digital gold benefits
Digital gold can be bought only through Koshex in just a couple of clicks. There is no need for you to go to the store or even leave the house.
At this age of the pandemic, it is safe to buy digital gold, as it doesn’t require you to step out of the house. On the other hand, it is just as hassle-free when you want to sell it.
The transactions will happen at the prevailing gold prices, but some institutions might levy some charges.
You can put any amount of your savings to invest in digital gold. It doesn’t matter if you are in the early stages of your career and do not have enough savings to make a considerable investment.
You can start investing in digital gold with just ₹100, unlike physical gold, which is more expensive to buy.
When you buy physical gold, there is a slight hint of worry about whether you are buying authentic 24K gold.
However, when you buy digital gold, the gold the companies buy on your behalf is pure as it is their responsibility to make sure of the gold’s purity.
It is easy to convert digital gold into physical gold. Instead of selling the gold, you can convert it into coins or jewelry. The physical gold can then be delivered to you directly.
When you hold physical gold in your house, there are risks of robbery. However, with digital gold, it is the company’s responsibility to keep it protected.
You can log in and access them anytime you want through your phone.
No Maintenance Required
Unlike physical gold, digital gold doesn’t need any maintenance on your part and you can easily keep them in a safe place for several years.
Use As Collateral
One of the greatest digital gold benefits is that it serves as an ideal form of security that you can use for availing of online loans. It counts as an asset and can be pledged as collateral for credit.
If you are looking to balance the risk factor in your overall investment portfolio, digital gold provides the perfect investment mode for you to diversify. When you have allocated a lot of money into equity mutual funds or any other risky assets, it is a good idea to include digital gold to reduce the risk and increase the gains.
Do It With Koshex
With Koshex, you can buy digital gold with ease and you can start your gold journey with as little as ₹100. Apart from buying digital gold, you can also gift gold to your loved ones.
You don’t have to worry about making charge and your loved ones don’t have to worry about the safety and purity of the gold.
According to historical data, the value of gold tends to go up in time. So, the ₹5000 digital gold that you gift today might be worth ₹1,50,00 in the future.
You can also invest in a ‘Gold Savings Plan‘ and through this, you can set up a monthly or weekly plan to buy gold. You can enter the investment amount, frequency, tenure, and start date.
The amount will be deducted automatically from your bank account and digital gold will be bought for that amount.
Doesn’t that sound amazing? You can create an account with Koshex and buy digital gold in less than 3 minutes. Be a smart investor, and choose digital gold with Koshex today.
All you need to do is to head over to our platform and create an account to start your digital gold journey. You don’t even have to verify your KYC when you buy digital gold for up to ₹2 lakhs.
Join millions of smart investors today by choosing digital gold.