Tips to Choose the best Platform to buy digital gold online in India
With physical gold being highly scarce, digital gold has become a better choice for investors to invest in this yellow metal. The benefit of digital gold is that it is flexible and offers easy accessibility. The best part is that you can invest as low as Rs. 100/-, allowing you to accumulate to the amount you want in the future.
Here are the best ways to invest in digital gold in India:
Sovereign Gold Bonds
Sovereign gold bonds are issued through the Reserve bank of India by the government. They were introduced under the Gold Monetization Scheme. Each SGB represents 1 gram of gold and therefore, allows you to invest in gold digitally. On the other hand, you can avail yourself of an attractive interest rate. The interest rate is 2.5% per annum, and it is paid semi-annually by the Reserve Bank of India (RBI).
It is worth noting that SGBs is a stable form of investment, as they are backed by the government. They have a minimum duration of eight years, and you can redeem the gold after the fifth year. However, individuals are limited to investing in up to 4 kg of gold, while Hindu Undivided Family has a limitation of 20 kg per year.
Here are the perks of investing in Sovereign Gold Bonds:
- There is no risk of losing the bond as you can keep it in Demat form.
- It eliminates the risk of storing physical gold. Also, as an investor, you can earn interest on the gold which has been in secured vaults.
- It is worth mentioning that if the bond is held beyond the eight-year maturity period, you are free from the liability of capital gains tax.
- It allows you to take loans. Even after getting a loan, you can get the interest on SGBs, reducing the effective rate of the loan.
- Another benefit is that SGBs are transferable, or you can gift them to your loved ones.
Gold Exchange Traded Funds
It is a mutual fund whose units can be purchased from stock exchanges. Many asset management companies have their own gold ETFs. So, if you wish to buy digital gold in Coimbatore online, investing in ETFs is another way to go about it. The benefit of investing in ETFs is that you can invest in gold in small quantities. They are considered optimum if you want to buy gold in small quantities and keep it in a Demat account. The investors have access to 99.5% pure gold, making digital gold a safe investment option. It is a better option for investors, such as students, who have small capital and want to have an allocation in gold.
Here are the perks of investing in Gold Exchange Traded Funds:
- The assured purity of gold stands at 99.5%.
- It eliminates the safety and security concerns, as the mutual fund industry is regulated by the SEBI.
- Another benefit is that the expense ratio of the Gold ETFs is very low, making it an affordable option.
- When you buy digital gold online, it allows you to take a loan against your ETFs from various financial companies.
Multi Commodity Exchange
It is one of the best ways to trade in gold. Even It offers a platform to trade in commodities, such as gold, silver, copper, etc. It enables you to trade in such commodities through futures and options. It allows investors to hedge their positive in gold. It is worth pointing out that the yellow metal can be traded under various quantities, such as 1 gram, 8 grams, 100 grams, and 1 kg units.
Digital Gold Wallets
Another way to buy digital gold online is through digital gold wallets. Many companies in India have introduced gold wallets. These companies are PhonePe, GooglePay, Paytm, etc. They provide their users the facility to invest as low as Rs. 1 in the gold wallet via online fund transfer facilities. They store your gold in the lockers of MMTC-PAMP.
The purity of gold is predefined. It can be sold and bought any time from anywhere through mobile applications.
Here are the benefits of digital gold wallets:
- It eliminates the investors’ concern about the purity of gold. While investing in the yellow metal, you are guaranteed 99.5% purity.
- The purchased gold is stored in secured vaults verified by an independent trustee.
- It offers the investors to enjoy a passive income in the form of interest.
- You no longer have to incur the making charges.
If you are looking for the best place to buy digital gold online, it is advisable to pay heed to the above-said points. They offer a better investment option as you can invest as low as Rs. 100 and accumulate it to the amount you want in the future.