1. Summary
  2. Investing in Physical Gold
  3. Investing in Digital Gold
  4. Investing in Sovereign Gold Bond


Is Digital Gold very a secure investment? How’s it completely different from the antique physical gold we’ve been seeing over the years? This article indicate the precise significance of Digital Gold.

Investing in Physical Gold

Physical gold may be a smart investment if you wish for Gold within the sort of jewelry. But did you recognize that you just virtually pay 10 – 15 August 1945 additional for physical gold as creating charges, which implies that if you get Rs 50,000 value of gold, you may pay virtually Rs 60,000 attributable to adscititious creating charges, And not solely that, you furthermore might need to pay an extra three-dimensional as GST?

There are some additional disadvantages like:

  • The risk of thieving and impurity in physical gold
  • You need to pay melting charges whereas merchandising reduces its price and lowers it than the particular price
  • You cannot obtain physical gold in tiny quantities. you can’t invest solely a hundred or 500rs. you have got to shop for a minimum of one gram that prices around 5000rs.
  • No regular financial gain. you’ll be able to solely create profits if you sell it at an enhanced worth however not as monthly or annual interest.

We simply saw why physical gold isn’t a really smart investment. currently, let’s take a glance at digital gold.

Investing in Digital Gold

Let’s investigate how digital gold makes up for the cons of physical gold and in this manner, we’ll even be able to perceive what digital gold truly is.

Let’s talk about safety first

Digital gold is changed via bank transfer. Assume that you just have an HDFC account and your friend wants 1000rs. What you may do is, open the app and do a UPI or NEFT transfer of 1000rs to his checking account. You gave your friend 1000rs however you didn’t very need to physically move to the bank or collect and deposit cash. the whole method was electronic.

  • Similarly, after you obtain physical gold, you get the physical delivery. even though it’s a tiny low gold coin, you’re chargeable for its safety. However, after you obtain digital gold from some company, the gold is held in therein company’s warehouse and its safety isn’t your responsibility. the corporate takes care of the gold’s safety and security. And even though there’s a thieving or another misfortune that befalls the warehouse, the corporate has insured it and you’re still safe.
  • Next up, since you’re not obtaining a physical delivery, you have got the choice to shop for gold value solely Rs one hundred, Rs five hundred, or Rs one thousand in line with you would like. And at that time, it was the company’s downside on how they distribute it. they might store one gram of gold in their warehouse and tag it as underneath the joint possession of 5 folks that paid Rs one thousand every. This makes it just like mutual funds and makes it cheaper and accessible.
  • There is additionally additional liquidity as you’ll be able to sell this gold whenever you wish with several clicks and nobody can doubt the purity.

But there are still some issues that even digital gold can’t solve. Like:

  1. Taxation: Even here, you continue to need to pay the three GST and
  2. Regular Income: you’re still not obtaining any regular financial gain or profit unless you sell it at honest worth.

Investing in Sovereign Gold Bond

Let’s directly take a headfirst plunge into its blessings.

  1. Rather like in Digital gold, here additionally you don’t need to pay any additional charges whereas getting.
  2. However, the simplest half is that you just additionally don’t need to pay any GST on sovereign gold bonds and this suggests that you just don’t need to pay any extra cash for getting.
  3. The bonus of those bonds is that you just get an annual interest of two.5% of the value.
  4. That permits you to use this as an extra financial gain supply.
  5. And it does not solely provide you the interest sort of a bank will on your savings, however, it additionally permits you to induce the exploit gold worth appreciation.

Sovereign Gold Bonds additionally give eight-year ‘lock in to redeem benefit’ from the tally. attributable to that, once you get this, you’ll be able to solely redeem it from the tally once in eight years. this complete method is online and is kind of straightforward.

Say if you invest Rs 5000 these days, and eight years later, its price becomes Rs 10,000, you won’t need to pay any financial gain tax on this Rs 5000 that you just attained. this is often solely potential although, if you retain it for eight years that isn’t a compulsion.

You can additionally exit once 5 years however as a result if you’ve exited early, you have got to pay the financial gain tax. However, what if you wish to exit before 5 years? this is often additionally potential through the exchange. you’ll be able to decrease these days and sell it tomorrow the approach you’ll be able to do with stocks and mutual funds.