It is said to be the safest form of investment. Every Indian mother gifts her daughter on her big day with it. It is considered to be a super metal, one solution to numerous problems. It is gold.

Gold has been an infatuation for Indians for centuries. So much so that Indians account for one of the largest gold consumption in the world. Gold does not just have a religious connotation, status symbol, or serve as a family heirloom but has a sentimental value for the people of India.

The new generation has a new way of thinking. Gold is viewed as a ‘traditional’ investment. With payments, shopping, and even education being digitized, gold too, has become digital. Digital Gold is the new trend that is becoming popular with millennials.

Digital gold is the buying and investing of gold without having to physically store the gold. The gold is stored in the insured vaults of the seller for the buyer. In short, once a consumer invests in digital gold, the buyer purchases an equivalent amount and stores it in secured vaults under the buyer’s name. All that is needed is mobile or net banking.

What is the process of investing in gold?

Digital Gold can be bought on multiple platforms.

Once you are on your preferred platform, you can choose to purchase it by buying it for a fixed worth or by weight at the live market.

A KYC process needs to be completed after which you can choose to proceed to make your payment through the mode that you like — account, card, or digital wallet.

The amount that you have purchased will be stored in a vault which can be accessed 24x7.

You can choose to sell your gold or have it delivered to your doorstep in the form of coins or bullion.

Gold Accumulation Plan(GAP)

GAP allows you to purchase digital gold through a partnered platform account. The transaction value is between Rs1-Rs1000 depending on the chosen platform. The live price of gold is made visible to the buyer in real-time through websites or applications which give the buyer the choice to make their decision. Purchase of gold can be made within an hour of the 24 hours of the day on all days of the week and year including on public holidays.

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Why is digital gold gaining popularity?

Digital gold is a relatively new concept in India gaining popularity. Let’s weigh the pros and cons to understand how it could be beneficial as an investment.

Pros

Liquidity: Gold is often known for its liquidity. Consumers can sell their gold through their bank account at any given time from the platform they have purchased it.

Authenticity: The gold that is purchased has to have a particular standard for it to be certified by a government-licensed agency. All coins, bars, or bullions are certified independently to ensure the purity of the gold.

Security: Gold is stored in physical form in vaults with full insurance.

Accessibility: Gold can be bought through an online platform from the convenience of a phone through UPI wallets or mobile wallets. Gold can also be physically delivered to your doorstep.

Collateral: The purchased gold can be used as collateral for loans. Much like real gold, it is accepted when taking a loan.

Low investment: For those people who do not wish to invest high amounts, can choose to make investments for an amount as low as Rs1. They do not need to save up and can use their desired amount of funds towards the investments.

Cons

Limited investment: A consumer can make a maximum of Rs 2 lakh of investment in a single day. Consumers who wish to invest higher amounts have a cap on their investment.

Additional cost: Additional costs of delivery or making charges are incurred by the buyer if they wish to get doorstep delivery.

Limited duration for storage: Some companies offer only a particular period for which a buyer can store their gold in the vault. After the duration, the buyer can proceed to choose if they wish to sell the gold or receive a physical delivery.

Lack of regulating body: There is a lack of regulating bodies such as SEBI or RBI

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Digital gold is still a concept that Indians are unfamiliar with. The distinction between physical gold and digital gold confuses the buyer to decide which they prefer. However, Indians love for gold is unprecedented which creates an opportunity for the digital gold market to boom in the coming years.

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