Why Should You Consider Buying Digital Gold?

Benefits of Digital Gold Investment

Investment in the digital form of this yellow metal can bring in a host of advantages. These are as follows: 

• Secure Storage

The most significant advantage of digital gold is its hassle-free and safe storage. The company offering digital gold will store one’s purchased gold in secure vaults. As the buyer does not possess the gold, he also saves locker charges and needs not to worry about theft or loss of gold.

• No Lower Limit on Investment

There is no lower limit on investment; an individual can invest in any amount of gold. The person will get possession of the quantity that he/she has invested. Gold worth one rupee can also be bought. 

• Use as Collateral

One can use digital or electronic gold can be used as collateral for loans. Some lenders accept it as collateral since these come with 24K purity and are stored in secured vaults. It helps borrowers avoid the hassles related to the paperwork of collateral and reduces their chances of loan rejection.

• Ease of Exchange

Another significant advantage of digital gold is that it can be easily exchanged anytime and anywhere for physical gold, coins, and bullions. This flexibility allows individuals looking to convert their digital assets into physical ones. Individuals wanting to access their physical gold can have it delivered to their doorsteps.

• Genuineness

Virtual gold is 24K and thus comes with 99.99% purity. Buyers do not have to worry about purity and genuineness. Chances of fraud are negated, and purchasers get the value that they have paid.

However, digital gold also comes with some drawbacks, which have been discussed as follows.

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Risks with Digital Gold

• No Regulatory Body

One of the major disadvantages associated with virtual gold is the lack of regulatory agencies governing rules and regulations for trading. As a result, it leaves a lot of grey areas that unscrupulous elements in the ecosystem could exploit. 

• Storage Time Limit

Physical gold is stored in secured and insured vaults. However, there are many platforms that provide such storage facilities for a specified period of time. After the expiry of the said period, one will have to withdraw the gold or sell it.

• Upper Limit of Investment

Investment in virtual gold comes with an upper limit. Currently, an investor can invest up to a maximum of 2 lakhs on most platforms. So, it is not an attractive option for investors looking to make significant investments.

Who Sells Electronic Gold?

In India, there are three entities that offer investment in digital gold:

• MMTC PAMP India Pvt. Ltd. 
• Augmont Goldtech Ltd. 
• Digital Gold India Pvt. Ltd. (SafeGold)

These entities have the license to sell gold online in India.

Final Word

The world is rapidly moving away from traditional physical assets to digital ones. In spite of some drawbacks like investment limits and lack of a regulatory body, virtual gold is a lucrative option for investment. It offers flexibility, purity, and proper value for money.

Disclaimer: This blog is solely for educational purposes. The securities/investments quoted here are not recommendatory.