Gold has always persisted as one of the most reliable investment options for households worldwide. But the number one limitation pertaining to this precious metal was that it was impossible to buy physical gold using smaller sums until the concept of digital gold was born. So, what is digital gold?
Think of it as gold existing in the virtual space. Digital gold is an alternative that allows you to purchase specific quantities of this precious metal online, eliminating the need to buy gold in its physical form. The gold you acquire is then stored in an insured vault maintained by the intermediary.
But is digital gold a suitable alternative to material assets like gold bars or jewellery? Stay with us to find the answer and explore the benefits of digital gold!
Exploring the Investment Options for Digital Gold
When you buy physical gold, you initiate direct contact with the seller to complete the sale. But during transactions related to digital gold, the number one requirement is a mediating party. This is usually a mutual fund house or another financial institution investing in gold and related instruments on your behalf.
So, how to buy digital gold? Here are a few popular options:
Gold Mutual Funds
Similar to how equity mutual funds pool their investments in shares of different companies, gold mutual funds attach themselves to paper and physical gold. Some fund houses may also pool money into companies that mine or extract gold.
Note: The criterium is that 80% of the investments done by gold mutual funds must be in gold-focused instruments.
Sovereign Gold Bonds (SGB)
On behalf of government authorities, regulatory bodies offer sovereign gold bonds (SGBs), where each bond represents one gram of gold.
What makes SGBs attractive: The additional 2.5% rate of interest accrued annually, along with the returns acquired due to the appreciation in gold's value.
Gold Exchange-Traded Funds (ETFs)
Unlike mutual funds, Gold ETFs are passive instruments that focus on delivering value by following the prices of physical gold. These are considered commodity funds, except they trade like stocks.
Key difference: ETFs are more similar to stocks since you require a demat account to buy and sell them.
Is Digital Gold a Worthy Investment?
The digital gold price varies according to the underlying instrument, i.e., the precious metal. But is it worth investing in digital gold over physical assets like jewellery? Let's explore the key advantages:
Assurance of Pure Gold
Digital gold is always of the purest form. Every virtual gold bought and sold on stock exchanges is 24 karat, or 99.9% pure. No concerns about purity or authenticity.
No Minimum Investment
Physical gold assets require you to purchase a minimum quantity, compelling you to shell up a few thousand bucks to start your gold investment. However, most mutual funds, ETFs and bonds do not possess any such criterium.
No Additional Storage and Maintenance Cost
Physical gold has to be stored carefully, with a special emphasis on maintenance to preserve the lustre of the metal. Amidst these processes, you can incur a host of costs that digital gold eliminates.
Take Your First Steps into Digital Gold Investing with Goldtrust Citizens!
Digital gold investments are made simpler with Goldtrust Citizens. Employ our dedicated investment solutions to partake in gold mutual funds, ETFs, and bonds with competitive rates. Coupled with our intuitive user interface and mobile banking, Goldtrust Citizens is perfect for novice & seasoned investors alike.
100% Secure Platform
Goldtrust Citizens operates with robust security measures and is fully regulated. Your investments are protected with comprehensive insurance coverage.
Flexible Investment Plans
Choose from weekly, daily or monthly SIP (Systematic Investment Plan) payments or set up automatic payments with a single tap through our mobile app!
Intuitive Mobile Banking
Manage all your gold investments through our easy-to-use mobile app. Track gold prices in real-time and make investment decisions on the go.
Expert Guidance
Our financial advisors are here to help you make informed decisions about gold investments tailored to your financial goals.
Ready to Add Gold to Your Portfolio?
Start investing in gold with Goldtrust Citizens today.
Frequently Asked Questions
Q) What is digital gold?
Digital gold is a virtual form of gold, granting investors the flexibility to avoid purchasing physical gold while capitalising on the appreciation of gold's value. It represents ownership of physical gold stored securely in insured vaults.
Q) How to buy digital gold?
You can purchase digital gold through one or all of the following investments:
- Gold mutual funds
- Gold ETFs (Exchange-Traded Funds)
- Sovereign gold bonds
Q) Where can I buy digital gold?
You can use platforms like Goldtrust Citizens to invest in digital gold through gold mutual funds, ETFs, or directly purchase sovereign gold bonds offered by regulatory authorities. Visit our branch or access your account through our mobile app to get started.
Q) Is digital gold safe?
Digital gold is a secure and reliable method of investing in gold without purchasing physical assets. With Goldtrust Citizens, your digital gold investments are backed by physical gold stored in insured vaults with bank-grade security. All transactions are fully regulated and transparent.
Q) What are the fees for gold investment?
Fees vary depending on the investment type. Gold mutual funds may have management fees, ETFs have trading commissions, and physical gold storage has vault fees. Goldtrust Citizens provides transparent fee structures with no hidden charges. Contact our advisors for detailed information.