Digital Gold: How it Works, Where to Buy, Benefits and Advantages
Since time immemorial, gold has been the preferred investment option for Indians. Apart from having an emotional bond with gold, the Indians treat the yellow metal as a hedge against inflation. Nothing much has changed since then, except the manner in which people buy gold. Earlier, people used to buy gold in the form of coins, bars, biscuits, or bullions, but now they prefer buying digital gold.
What is Digital Gold?
Digital gold is a virtual method of buying and investing in gold. Here, the investors do not have to worry about holding the gold in physical form. Digital gold can be purchased online with a minimum investment of as low as one rupee.
How Does Digital Gold Work?
The process to buy digital gold is very safe, secure, and convenient. First, one needs to visit an online platform like OroPocket that allows digital gold investments. Once you download the mobile app, you need to do the following:
- Decide an amount in INR or amount of gold you want to buy. This gives you the flexibility to invest in gold according to your budget.
- Upload your KYC documents. Post verification, you get multiple payments options like net banking, credit/debit card, or e-wallet.
- As soon as the payment is made, your digital gold account is updated instantly. Physical gold worth that amount is stored safely in digital vaults. There is no charge for keeping the gold in the secured vaults.
- Investors can easily track the price of their gold investment. They can sell the gold itself to the platform and get the amount at the live market rate whenever they get a good price.
- If required, the investor may convert their digital gold into physical gold and get it home delivered by paying a nominal delivery charge. As soon as the investor decides to withdraw the investment, the gold is removed from the vault.
- Thus, digital gold offers the customers an easy way to invest in gold, assuring purity and security of returns.
How Safe is it?
Digital gold is very safe as an investment idea. To begin with, it offers 24K physical gold with a 99.99% purity. Investors do not have to worry about storing it safely. The financial entity provides safe and secure storage without any cost.
FinTech platforms like OroPocket offer complete integrity with 1:1 backing of physical assets audited by independent auditors daily. If you decide to sell your digital gold, you can sell it safely to the financial entity or get it converted into physical gold and get it home delivered. The entire process is completely transparent, safe, and secure.
Key Features of Digital Gold
The key features that differentiate digital gold from physical gold are listed below:
Safe and Secure
Unlike physical gold, buying, storing, and selling digital gold is completely safe. Since no physical gold is involved, there are no risks of getting lost or stolen.
When you invest in digital gold, the financial entities buy the physical gold worth the same amount in your name. These companies have experts who ensure that you get 24K gold with 99.99% purity.
The price of physical gold may vary from place to place, but the price of digital gold, on any given day, is uniform across the country.
Sell it Anytime From Anywhere
If you want to sell your digital gold, you can sell it anytime without stepping out of your home.
Convert to Physical Gold
Besides selling it, you also have the option of converting your digital gold holdings into physical gold. By paying a nominal amount, you can get this physical gold delivered safely to your doorstep.
Make a Small Investment
With digital gold, you can invest in gold with an amount that your pocket allows. The minimum investment can be as low as one rupee.
Benefits of Investing in Digital Gold
Digital gold is fast becoming the preferred method of gold investment for the smart generation of today. The various benefits of investing in digital gold are as follows:
You Can Make Small Investments
There is no minimum investment limit for digital gold. One can start investing with an amount as low as one rupee. This suits small investors with a tight budget but who want to invest in gold to secure their future.
You Get Uniform Pricing
The price of physical gold may vary from city to city and state to state. However, the digital gold prices across the country are uniform.
No Issues of Purity and Quality
Physical gold may have issues related to purity and quality. However, digital gold comes with an assurance of 24K 99.9% purity gold.
Easy and Quick Redemption
Redeeming digital gold is very simple and fast. One can even get it converted into physical gold coins or bars.
Getting a Loan Against Digital Gold
With purity of gold assured, one can easily use this digital gold as collateral and get a loan against this gold.
No Safety Issues
Unlike physical gold, digital gold assets are insured and kept safely deposited in a vault. As a result, there is no risk of theft or robbery.
Track Investment Regularly
The movement of digital gold can be tracked online. It helps them track their investment and gain invaluable insights into the process.
Diversify Your Portfolio
As per the golden rule of portfolio management, it’s always better to have a diversified portfolio. Investing in digital gold not only diversifies your portfolio but acts as a tool to hedge against inflation.
Why is Gold Shining During a Pandemic?
Gold has always been known as a man’s best friend in bad times. That’s why people invest in gold to hedge themselves inflation. However, the recent times of Covid-19 and the resulting lockdown created an environment of uncertainty everywhere. With businesses closed down, people losing jobs, or being forced to work at 50% of their salaries, everyone was forced to dig deep into their savings.
In such dire times, gold investments come very handily. More and more people realized the importance of investing in gold, which comes to their rescue in such financial hardships.
Also, in the pandemic, the investors were wary of the spread of the Covid-19 through physical gold. But with digital gold, there are no chances of contracting the virus. So, this is not only profitable but medically safe as well. As a result, despite the overall market being down, the yellow metal did not lose its shine during the pandemic.
Best Time to Buy Gold
If you see the historical data, the gold prices tend to rise during the first few months of the year. Then, the prices take a dip during spring and summer and take again go up as winters set in. Going by this historical trend, the best times to buy gold are early January, March, and early April, or mid-June to early July.
Best Place to Buy Digital Gold and Silver Online
The best place to buy digital gold and silver online is using financial platforms like OroPocket. They provide a smooth transaction in a convenient and transparent manner.
How to Buy Digital Gold on OroPocket?
Buying digital gold on OroPocket is not just safe but also very convenient. The process can be broken down into a few simple steps.
1. Download the OroPocket app on your mobile.
2. Complete your KYC and add your bank details.
3. Decide the amount of digital gold to be bought. At the prevailing market price, one can buy digital gold of a fixed amount or fixed weight.
4. Select your preferred online payment option like UPI, debit card, credit card, net banking, among others.
5. Make the payment.
6. The digital gold bought is now safe and stored safely in OroPocket digital vaults.
The new generation appreciates the convenience of working and freedom to do-it-yourself in whatever they good. Digital gold stands good n both these parameters. That’s the main reason digital gold is fast becoming the preferred choice of smart investors.
Investors get the flexibility of deciding the initial investment, either in rupee terms or weight terms. They also get the flexibility to track its movement on commodity markets. They can sell it whenever they want, and from wherever they want. They also have the freedom to get it converted into physical gold and get it home delivered.
Frequently Asked Questions
Q1: Is KYC mandatory?
Ans: Yes, for any financial transaction KYC is mandatory.
Q2: Are there any charges for the storage of gold?
Ans: Most financing companies offer the storage of gold without any cost. However, this is for a certain period. Companies like OroPocket provide free storage for an unlimited period.
Q3: Is PAN card mandatory?
Ans: Any transaction in gold above Rs. 2 lakhs requires PAN details on a mandatory basis.
Q4: What is the minimum & maximum amount needed to buy gold?
Ans: With OroPocket, the minimum amount to buy digital gold can be as low as one rupee.
Q6: Why are buy and sell rates different?
Ans: The gold prices are volatile and subject to change. That’s why when you buy gold, you get it at market price, but when you sell it, the buyer wants to hedge himself against this volatility. So, he pays a little less than the gold price that day.