Is it safe to invest in Digital Gold?

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Digital Gold
Image Source: India News

The whole situation of a pandemic has made people more aware of being financially stable. Investments are the best way to start wealth creation. With the availability of various avenues to invest in, digital gold is emerging as a new trend among people. Gold is more than investments for Indians; from ancient era gold is taken as a legacy. However, some changes have occurred over the times regarding investment in gold.

What is Digital Gold?

There are several ways in which one can invest in gold either physically or virtually, most likely of which today are gold bonds and gold ETF and the most preferred method of investment nowadays is Digital Gold. With subsequent growth in the trend of the digital market in India, consumers are getting more attracted to the idea of investing in this type of gold. It is a pure hassle-free method of buying and storing gold digitally. It allows consumers to purchase gold digitally without being physically present in front of the seller. The seller purchases the gold on the behalf of consumers, of the amount equal to which the consumer wants to invest. The companies do not charge extra for the vault. Also, the customers have access to these vaults.

The process of Investment

At present time in India, three companies are dealing in such investment; Augmont Enterprises Private Limited; MMTC-PAMP India Pvt. Ltd, it is a joint venture between state-run MMTC Ltd and Swiss firm MKS PAMP which deals in precious metals; and Digital Gold India Pvt. Ltd offering its SafeGold brand. For every amount invested in gold through these digital platforms, an equivalent quantity of gold is physically stored in vaults, monitored by a ‘trustee’ appointed by the companies to ensure the validity of the gold to the consumer.

Benefits that digital gold serves over other gold investments

Digital Gold provides the flexibility to the consumers to buy or sell the gold at any time and anywhere. It has made the trading more convenient, unlike physical gold, it is less time-consuming and strenuous. It also comes with an advantage of on requirement money conversion, which means investors can liquidate the digital gold whenever they want, hence acts as a rapid liquid asset. In addition to this, it does not include any extra making costs, as consumers directly invest in 24k gold. Although making and delivery charges may imply if consumers want to acquire the purchased gold physically.

Digital gold is undoubtedly efficient and convenient, it also has some look-after points, investments are subjected to wealth tax, contrasting to any other gold investments. Also, there is a maximum holding limit for the investors, before which they should either take the delivery or sell it back. Even though it is a less complicated way of gold investment, investors must have their discretion and think mindfully before investing in any of the assets.

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