Gold has always been a preferred investment option for Indians. However, traditional gold investments come with challenges like storage, theft risks, and additional charges. A modern alternative is digital gold, which allows you to buy, store, and sell gold online securely. In this guide, we’ll explain how to start investing in digital gold, its benefits, and things to consider before making an investment.
For a comparison of digital gold with other options, check Digital Gold vs Gold Bonds: Where to Invest?.
What is Digital Gold?
Digital gold is an investment option where you can buy gold in small quantities online, backed by physical gold stored in secured vaults by trusted companies like MMTC-PAMP, SafeGold, and Augmont.
Key Features:
- Buy gold for as low as ₹1
- Backed by 24K physical gold
- No storage hassles
- High liquidity
- Can be converted into physical gold or cash
- Allows investors to accumulate gold over time without large upfront costs
For more details, check What is Digital Gold?.
How to Start Investing in Digital Gold?
1: Choose a Platform
- Banking apps
- Payment apps
- Stockbroking platforms
- Investment platforms like Fello
You can buy digital gold through:
2: Complete KYC Verification
- Provide PAN and Aadhaar details.
- Some platforms allow small investments without full KYC.
- Ensuring proper KYC verification enhances security and ensures smooth transactions.
3: Decide Investment Amount
- Invest as per weight (grams) or amount (₹ value).
- Prices are based on real-time gold rates.
- It is advisable to track market trends to buy at a lower price and maximize returns.
4: Make Payment
- Pay via UPI, net banking, debit/credit card.
- The purchased gold is stored in secured vaults.
- Some platforms offer discounts or cashback on digital gold purchases during festive seasons.
5: Track & Manage Your Investment
- Monitor gold prices regularly.
- Sell anytime for instant bank transfer.
- Convert into physical gold (coins/bars) if needed.
- Investors can set up SIPs in digital gold to accumulate wealth systematically over time.
Benefits of Investing in Digital Gold
| Feature | Digital Gold |
| Storage | Stored in secure vaults |
| Liquidity | High – Sell anytime |
| Minimum Investment | As low as ₹1 |
| Security | Backed by 24K gold |
| Conversion | Can be redeemed as physical gold |
| Flexibility | Can be accessed anytime, anywhere |
| Affordability | No need for a large upfront investment |
Risks & Things to Consider
- Not SEBI or RBI Regulated: Unlike gold bonds, digital gold lacks official regulation.
- Storage Charges: Long-term storage fees may apply after a certain period.
- Platform Dependence: Investment security depends on the service provider.
- Tax Implications: Capital gains tax applies on profits.
- Market Fluctuations: Prices of gold can fluctuate based on global and economic trends.
- Limited Physical Redemption Options: Not all platforms offer doorstep delivery of physical gold.
For alternative gold investments, check What Are Gold Bonds & How to Invest in Them?.
Tips for Maximizing Returns
- Track Gold Prices: Regularly monitor market trends to buy when prices are low.
- Diversify Investments: Invest in a mix of digital gold, gold ETFs, and sovereign gold bonds.
- Avoid Panic Selling: Gold is a long-term asset; avoid selling based on short-term fluctuations.
- Consider Tax Implications: Be aware of capital gains tax on digital gold profits.
Conclusion
Investing in digital gold is an easy, flexible, and secure way to own gold without physical storage concerns. If you are looking for high liquidity and small investment flexibility, digital gold is a great option. However, investors should be aware of tax implications and market risks before investing.
To explore other gold investments, check Types of Gold Investments in India.
