Digital gold eliminates problems with purity, storage, and security. However, it may involve fraud, market risk, expenses, redemption restrictions, and tax consequences.
Since India is moving towards a better economy where people are spending on investments, digital gold would be a good option to have immense returns than physical gold. Also, the cost of digital gold is less as compared to physical gold which includes making and handling costs.
There is no need to worry about storing the digital gold. Because these are kept with the seller on behalf of the customer in secured vaults with maximum security. Hence, you do not have to pay locker charges which leads to low storage costs.
Trade digital gold for gold jewelry, gold coins, and gold bars. This allows the buyer to be flexible in converting digital assets into physical assets. Additionally, if you wish to convert your digital gold into a physical one, then you can do it anytime with ease since your physical gold will be delivered to your doorstep.
Due to digital gold as collateral, the borrower does not have to be involved in a lot of paperwork as the digital gold is kept securely in vaults and has a purity of 24K. So, it makes the loan approval process easier and faster.
You can invest in gold as much or as little as you want. The digital form of gold gives you the right to possess gold for as low as Rs.1 which is not feasible in the case of physical gold.
Digital gold has a purity of 24K or 99.5% which guarantees authenticity. Since quality and gold price varies among jewelers while purchasing physical gold, there is guaranteed purity and it is traded in real-time gold prices that lessen price ambiguity.
There is a maximum limit of Rs.2 lacs on most platforms for daily digital gold investment. Hence, you cannot spend more than that even if you want on a day.
The storage and vault facility is taken care of by some third party or intermediary which leaves room for exploitation of the purity and security of the asset. Also, it lacks the supervision of governing and regulatory authority.
In case you want to convert your digital gold into physical gold, the physical asset will get delivered to your doorstep. But the doorstep delivery comes with some delivery charges.
Most companies offer their secured vault or storage facility for a limited period of time after which the buyer has to mandatorily sell or withdraw the gold.
There is 3% GST while buying digital gold which adds up to the cost of investment alike while purchasing physical gold.