Gold, Knowledge

Gold Bullions vs Digital Gold: Which is Better?

Gold bullions vs digital gold: which is better to buy for an investor? Since the inception of digital gold, the investors have been stuck in the dilemma of choosing between the two gold investment options. While some investors have held their ground on considering gold bullions as the most superior option for investing in gold, millennials on the other hand are preferring digital gold for making investments. For the investors who are still unable to weigh the pros and cons of gold bullions vs digital gold, here we are presenting a detailed comparison between the two. 

What are Gold Bullions?

Gold Bullions refers to the physical gold which is stored in the form of coins, bars, ior ingots. Bullions have very high purity, usually 99.5% to 99.9%. Investing in gold bullions can be beneficial to the investors as they are stored as gold reserves by the national governments. It is best to invest in gold bullions via ETFs or future contracts. 

How to Buy Gold Bullions?

You can buy gold bullions easily from the market. However, finding the right seller in the flock of jewelers is pretty hard. There are sellers sitting at every corner of the streets. Now some people may think of buying gold from banks. That’s a big NO. You must never buy gold from banks because they sell gold at a higher price as compared to the market rates. Also, the purity of gold is never guaranteed. Therefore, it is best to buy gold bullions from renowned jewelers like Tanishq, and Kalyan Jewelers. 

Benefits of Buying Gold Bullions

  • Recognized by a government body
  • Physical gold is in the hands of the investors
  • Easy to buy and sell in the market, however it is time taking
  • Inheritance of gold bullions is easy
  • Doesn’t need a lot of maintenance
  • The prices are somewhat stable since there is government regulation on it

Drawbacks of Buying Gold Bullions

  • Theft risks
  • Additional storage costs
  • 100% purity can never be ensured

What is the Meaning of Digital Gold?

Digital gold is a digitized way of buying and selling gold. There are many platforms that are selling digital gold to investors. However, among all these platforms, OroPocket is the best because it allows investors to invest in gold for as low as Rs. 1. Furthermore, the transaction fee offered by OroPocket is the lowest among its competitors. You can buy other precious metals from OroPocket as well. In addition to this, you can get your digital gold converted to physical gold easily and get it delivered to you without any additional charges. 

How to Buy Digital Gold?

Buying digital gold is pretty easy. Firstly, you need to choose the best platform to buy digital gold for yourself. Once you have selected the ideal platform to buy digital gold, here is a five-step process to invest in digital gold.

  1. Download the mobile application.
  2. Sign up on the application with your details such as email address, name, contact, etc.
  3. Select the amount of gold you want to buy.
  4. Choose the preferred payment methods among the available options.
  5. Complete the payment and that is it. 

Benefits of Buying Digital Gold over Gold Bullions

  • Buying and selling are a few clicks away
  • Ensuring the purity of gold is easy
  • No additional costs for storage as it is safely stored in vaults
  • 100% asset-backed
  • Prices are uniform throughout the country
  • Investors can start investing in digital gold according to the money available to them

Drawbacks of Buying Digital Gold 

  • Not physically present with the investor
  • Trust issues may exist

Difference between Gold Bullions vs Digital Gold

FeatureGold BullionDigital Gold
Purity99.5% – 99.9% 24 Karat 99.9% 24 Karat Gold
PricePrices may vary depending upon the location.Prices remain constant throughout the country.
Ease of InvestmentDifficultExtremely easy
LiquidityLimited liquidity100% liquidity
StorageTricky as investors need to buy bank lockers and pay an annual locker maintenance fee.The seller stores the digital gold in insured vaults on behalf of the buyer; with no storage costs.
TradingTrading can be very tedious as investors need to find a suitable jeweler for getting the best price. Trading is super easy. You can buy and sell digital gold on the platform itself with a minimum transaction fee offered by OroPocket.
Taxation20% + 4% cess charge if the gold is held for more than 3 years.20% + 4% cess charge if the gold is held for more than 3 years.
Investment SizeDefinite investment size as the investor can buy whole bullion only.Investors can start investing in digital gold for as low as Rs. 1. 
TrustabilityLimited trust because investors can not trust just any jeweler selling gold bullions and buy from them. Digital Gold sellers are 100% trustworthy. There are only a limited number of digital gold sellers in the market. 
Comparison between Gold Bullions and Digital Gold

The Verdict: Gold Bullions vs Digital Gold

After making a detailed comparison between gold bullions and digital gold, we have reached the conclusion that digital gold is a better investment than gold bullions. Digital gold is 99.9% pure 24 Karat gold and stored in insured vaults located in different countries around the world. Buying and selling digital gold is very easy as the investor has to log into their accounts, select the amount of gold they want to buy or sell, and complete the transaction on the mobile application. The existence of digital gold has not only revolutionized the whole concept of investing in precious metals but also has enabled people from low-income backgrounds to invest in gold and protect their money.