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15 Interesting Digital Gold Facts that Make it a Healthy and Safe Investment

April 21, 2023

Table of Contents

    Table of Contents

      A well-balanced portfolio with digital Gold investments provides the freedom to spread risks evenly. Read on to know how it makes a safe investment option.

      People have been buying gold for ages now, and this yellow metal has gone through a big makeover through generations. Digital gold being the  new age investment, here are the facts about digital gold you should know.

      It is now a convenient, affordable, safe, and liquid investment. It has served as a perfect blend of investment, convenience, and risk-free performer.

      The pandemic also raised the critical need for long-term financial security, with digital gold investment showing a 150% increase through the 2021 global pandemic. 

      Hence, gold retains its hedge and buffer even in fluctuating markets. In turn, it makes it an economic shock-absorber when economies fail.

      In fact, between 2010 and 2019, gold delivered a whopping 134% return for investors!

      Today, Digital Gold promises durability and purity through many investing options. So, it makes it an essential part of every healthy and well-balanced investment portfolio.

      Virtual gold offers a risk-free storage facility, and with convenient online transactions, it is becoming a popular investment option among millennials. 

      So, if you are planning on putting your money on digital gold investments, then knowing these facts can come in handy. 

      15 Interesting Facts to Know for your Next Digital Gold Investment

      1. You can store it in a safe and certified vault

      Digital Gold is very much like its physical form. It’s a new-age product with a quick buying and selling process in seconds.

      You can buy digitized gold online and store it in a certified, insured vault. Investors don’t need to verify the purity and find secure storage for digital gold.

      Hence, it passes all the quality standards of 24-Karat Hallmark or 99.5% purity as an investment option.

      2. You may start as small as Re. 1

      India has three companies offering investment options for gold. These are SafeGold, Augmont Gold, and MMTC-PAMP.

      Digital Gold rates depend on weight, and the tiniest weight you can buy is 1 gram. The purchased gold sits under your name in the vault storage.

      The storage duration varies according to the company. Depending on the platform, the digital gold rates can be as low as Re. 1 to Rs. 10.

      3. You can buy online loans against digital gold

      You can get liquid cash against online gold and use it as collateral against online loans.

      Further, you can also redeem it by receiving it through coins, bars, jewellery, and bullion.

      Your gold is free in the vault for five years, after which the seller charges a storage fee if you don’t sell or redeem it. 

      4. You can invest through apps

      Purchasing certified 24K gold is hassle-free. It ensures that the yellow metal is a safe hedge against inflation.

      So, there is no right or wrong time to invest in digital gold. Savings and investment apps such as Jar help you round up your daily transactions and invest in digital gold.

      They enable the purchasing of gold and storing them in secured and SEBI-regulated vaults with 24k gold. You can receive it at your doorstep when redeeming it for physical gold.

      5. You can make continuous periodic investments

      Digital Gold is the most flexible, affordable, and secure option where the market’s location doesn’t influence the digital gold rates.

      The reason being investors can continue making small periodic investments. It helps develop a strong portfolio and secures a financial future.

      Since it links to the international market, gold is an affordable option. Also, the online vault secures the storage from robberies, thefts, or any other threats.

      6. Virtual gold is available 24x7

      Virtual gold takes the cake in the battle of digital Gold vs. Physical Gold due to its high liquidity.

      Unlike the latter, virtual gold has 24x7 availability while gold dealers sell and buy only during their working hours.

      It results in instant redemption, as customers can sell gold online at any time. Digital Gold investment doesn’t need any lock-in period. 

      But experts recommend not liquidating virtual gold immediately. For a robust financial portfolio, customers should treat it as a long-term investment.

      7. You can use digital gold as a cushion for wealth in uncertain times

      As of 2019, India remains the second-largest bar and coin market, accounting for 15% of global demand.

      In 2021, and Assets Under Management (AUM), the digital Gold investments in the country went up to 27%.

      Gold maintains its unique proposition against other instruments. It tends to move up the ranks even when stocks decline.

      The same reason makes digital Gold investment a profitable option.

      Likewise, it is an excellent addition to a diversified portfolio. It helps investors spread their risks across other assets in their portfolios.

      Hence, when currencies or economies take a dip, gold acts as a safety cushion for wealth.

      8. The spot price is the key factor while investing

      The spot price is the buying and selling price at the time of investing. It plays a crucial role when investing in gold. Also, the gold rates depend on each gram or kilogram.

      So, investors should always look at the spot price. Digital Gold also cuts down on intermediary costs, storage expenses, and manufacturing charges.

      So, investors can get total market prices.

      9. Low volatility increases your investment options

      Indian investors use it for numerous purposes. The first quarter of 2021 reported a 37% increase in demand for gold.

      Also, gold has high liquidity, low volatility, and stability. Hence, it also offers various investment options. 

      Many investment channels have also emerged through ETFs, Mutual Funds, Coins, and Gold Futures.

      The online platform PhonePe grew its YoY gold sales volume by six times. Likewise, PayTM saw an 86% jump in YoY sales during November.

      10. Low entry points make it affordable

      The period between 2020 and 2021 was chaotic for the global gold market. But gold investment reached a record yearly high of 1.773.2t with a 40% rise in demand.

      Likewise, the virtual gold investment in the Indian market scaled great heights.

      Due to low entry points, investments can start as low as Re. 1. So, it helps overcome affordability barriers.

      11. Digital Gold is Cheaper

      Physical gold has disadvantages because you can only buy it in multiples of 1 gm. It comes down to approximately Rs. 4,500.

      However, you can purchase digital gold with the smallest multiple of Re. 1. Physical gold also incurs manufacturing costs and a trip to the store.

      But, you can sell or buy digital gold instantly and receive money quickly in your account.

      12. No accounts and extra costs

      Sovereign bonds have lock-in periods. You also have to pay charges when you redeem them before the due time.

      Gold-Exchange Traded Funds or ETFs demand investors pay recurring costs and have a Demat account.

      But, digital gold ditches any administrative process and invests through applications. 

      The taxes are the same for both digital Gold investments and physical ownership. So, it gives another reason to invest in the former.

      The taxes depend on the holding period as Short-term Capital Gains (STCG) or Long-term Capital Gains (LTCG).

      The holding period for STCG is 36 months or less, while LTCG is for more than 36 months.

      13. You Get Full Market Value

      Virtual gold aims to protect the customers’ interest through robust systems. With physical gold, you run the risk of being unable to buy in emergencies, as it might be in coins or bars.

      In such cases, you might not get the full market value of gold. But, virtual gold offers you a fair deal as you will always get it at current market prices. 

      14. Gifting is more secure and storage-free

      Investing in digital gold doesn’t mean you can’t have it in physical form. It provides you with dual benefits.

      You can keep it stored in an online vault, and two, you can liquidate it as and when you need it.

      So, if you are a festival-savvy shopper, you can reap the full benefits of it by exchanging this gold at a jewellery store near you. 

      15. You keep the financial freedom

      Digital Gold is a new offering in the investment landscape. So, safeguarding customers’ interests is the top priority.

      SEBI and SafeGold introduced many security checks to keep the transactions under their purview.

      Hence, virtual Gold trumps security, convenience, and affordability compared to physical gold. 

      The lack of trust between sellers and buyers is the primary factor behind this switch.

      A decentralized payment system makes digital gold secure and sophisticated. It is trustless and accessible.

      Moreover, it provides financial freedom and custody of digital gold to customers.

      Final Thoughts: Digital Gold vs. Physical Gold – Which one is a Better Investment?

      Both physical and virtual gold act as insurance policies when stocks crash. But, when compared to other financial assets, digital gold fares better.

      As per the Association of Mutual Funds in India (AMFI), ETFs increased from 3.1 Lakhs to 24.11 Lakhs in India between 2018- 2021. It testifies its significance to the Indian landscape as a virtual asset. 

      With High-Net-Worth Individuals (HNIs) and millennials aiming to branch out their folios in new active markets, digital gold is one platform that’s on a rising trend and seems like a promising investment to make.

      Besides being a lucrative investment, digital gold also helps reduce carbon footprints, addressing sustainability and gold-mining issues.

      Safety and storage are the two factors making digital gold a preferred investment. Customers have to open accounts and lockers to keep physical gold safe.

      Even banks need you to open an FD apart from a locker rent. Digital Gold cuts through all the noise and provides an affordable investing option.

      Plus, starting your daily digital Gold investment journey takes only 45 seconds!

      You may explore more reasons why digital gold is a smarter investment option. This virtual asset is on an exciting journey ahead.

      It can remain as a reliable and safe storage instrument beyond banks. Leave all your worries about storage and safety; start saving by downloading Jar today!