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Everything you need to know before investing in digital gold

Gold has been one of the most popular investment avenues in India for ages. People used gold as a currency even before money came into being. While gold would no longer serve as a currency, you may still convert your money into gold by investing in this precious metal. With the value of gold stable or rising almost all the time, it happens to be one of the safest investment assets. Now that you can buy digital gold online, investing in gold has become even more accessible. You can seamlessly purchase gold in a virtual form from one of the trusted sellers at any time.

What exactly is digital gold?

As the name suggests, digital gold is a form of gold that you can purchase online and own without storing it physically with yourself. Unlike gold purchased from jewellers, digital gold mainly serves the purpose of investment. Here is how it works:

  • You may invest in this precious metal through one of the online wallets that allow the buying and selling of digital gold.
  • The seller would then store the gold on your behalf in a secured and insured vault.
  • As the whole process takes place digitally, you may access your gold online at any time.
  • If you prefer to own the gold physically, a simple click of a button will allow you to redeem it. The seller would then deliver the gold to your doorstep.
  • You may sell the gold back to the seller at any time. You would then receive the gold value directly in your bank account.
  • If you redeem the gold, you may choose to receive it in the form of coins or jewellery.

Thus, digital gold works quite similarly to physical gold regarding what you can do with it. However, it is far safer and more convenient to buy digital gold online for investment.

How pure is digital gold?

Purity is one of the most important aspects to pay attention to while purchasing gold. It indicates whether you are receiving what you pay for. Thankfully, this isn’t an issue while investing in digital gold, as it would be 99.9% pure 24-carat gold. Therefore, even while redeeming the gold to receive physical gold in the form of coins, you would receive hallmarked 999 purity gold coins. However, if you choose to receive the gold in the form of jewellery, the purity would be slightly lower, such as 916.

Also read: Guide to Start Investing in Digital Gold in India

Why are an increasing number of people investing in digital gold?

Recent trends clearly show that a growing number of people have been investing in digital gold. This trend grew especially during the pandemic. When people are looking for safe avenues to invest their hard-earned money, digital gold emerged as an excellent solution. Several factors have contributed to this trend:

 

  • Purchasing in instalments

 

While investing in digital gold, you may buy gold jewellery in instalments rather than having to pay for it all at once. This means that you can slowly accumulate gold by investing relatively small amounts of money at your convenience. Once you have purchased enough gold for the jewellery, you can have it delivered physically.

 

  • Safe storage

 

One of the critical challenges in investing in physical gold is that its safe storage might be an issue. However, you wouldn’t have to worry about the safety of your digital gold. The companies storing digital gold use state-of-the-art vaults and security systems that would guarantee your investment’s safety.

 

  • Collateral for loans

 

For decades, gold has acted as popular collateral against loans. The same applies in the case of digital gold, which you may keep as collateral while taking an online loan. This can prove to be extremely helpful if you need to borrow a large sum of money.

 

  • Purity

 

Investing in digital gold would save you the trouble of having to test the purity of the gold you purchase. While buying physical gold, you would have to ensure that the gold is as pure as the seller says it is.

 

  • Ease of buying and selling

 

A significant perk of investing in digital gold is that you can easily buy or sell it online at live market prices. Thus, there would not be any unnecessary delays in converting your gold to money when you need the latter urgently.

Investing in digital gold can prove to be a wise decision, considering the profitability and safety that come with it. Reputed companies like eSwarna allow investors to buy gold jewelry on installments and seamlessly sell or redeem their gold.