The country with traditional glorification of gold does not shun fintech innovations either, so digital gold is gaining ground in India. If you believe gold is a solid investment but don’t want to store it at home, consider buying digital gold. Here’s how you do it in India.
About one tenth of all the gold in the world is owned by Indian citizens. Although most of this gold is in the form of jewellery or bullion, there’s also rising awareness about digital gold products in India.
A survey by Axis My India showed that 35 percent of the population know of digital gold investment ways. Moreover, 10% of respondents said that they had already invested in digital gold. This type of gold investment is particularly popular among youth, with 15 percent of the 18-24 age group revealing their strong intent to invest into digital gold.
What Is Digital Gold?
The concept of investing in digital form of gold aligns with the global transition to digital forms of money. Buying digital gold doesn’t require the owner to hold the gold physically. Instead, the amount of gold equivalent to one’s investment is stored in seller’s certified vaults. When we speak of digital gold, we always deal with its purest 99,9% form – 24 carat.
One benefit of digital gold is that it doesn’t necessarily involve lump sum of money right away. You can buy digital gold even in small fractions. The minimum amount of digital gold one can buy costs as low as one rupee. That is not possible with gold jewellery, coins, or bars.
Digital gold can be bought online from various digital investment marketplaces and wallet apps. If you want to, you can later ask the seller to convert your gold into physical form (coins, bars or jewellery) and get it delivered to you. In this case, making charges incur. On the opposite, if you want to cash out your digital gold holdings, you can resell it back to the seller at current market prices.
Where Can I Buy Digital Gold in India?
India has three digital gold vault companies legally approved by the government:
- Augmount Goldtech,
- MMTC-PAMP India,
- SafeGold – Digital Gold India.
All other popular online investment portals and digital wallets like Spare8, Paytm, Groww, Gpay as well as other jewellers who offer digital gold trading are intermediaries cooperating with one or few of these abovementioned companies.
Considering the popularity of gold investments in India, all the major digital platforms in the country, including e-commerce portals, wealth management channels, banking and payment apps, are offering digital gold trading tools.
Augmont Goldtech is India’s leading gold and silver refinery and bullion company. It operates Augmont Digi Gold platform and the Gold For All platform – a one-stop gold trading solution for retail customers.
MMTC-PAMP India is a joint venture between Switzerland-based bullion brand PAMP SA and MMTC Ltd, a Government of India venture. It is LBMA-accredited gold & silver refinery in India, also accepted across global commodity exchanges and central banks.
SafeGold – Digital Gold India is a digital platform that allows customers to buy, sell and receive vaulted gold at low ticket sizes online 24/7. Besides trading, it also offers customers a service of gold leasing to verified jewellers.
Paytm is one of the most popular Indian e-commerce and fintech companies. It cooperates with MMTC-PAMP India to provide digital gold purchase services. For customers’ convenience the platform also offers checking live gold price before buying digital gold to make sure you get 24k gold at best rate possible.
How to Buy Digital Gold in India
Since the beginning of 2022, global geopolitical tensions have increased the demand for gold as safe investment. Technology-based ways to safeguard one’s gold holdings are also becoming more popular, as dealing with physical gold may be cumbersome. Buying digital gold, often referred to as DigiGold, is much simpler and faster.
First, you choose the trusted online platform to your liking. It can be one of the three licensed gold vaults in the country like Augmont, for example. Any resident Indian with a valid PAN/Form 60 and a bank account can buy DigiGold. To start trading, you need to sign up. That will require a valid local phone number. Only mobile number verification is required for successful registration. You’ll need to verify it with the OTP provided. However, you will be prompted to provide your PAN details once your purchases reaches a certain threshold limit.
The purchase process itself is very simple. You see a table with live gold rate and can fill in either an amount of 24k gold you want to buy (1-100,000g) or a price you’re willing to pay. For example, if you want to invest just 1 rupee, you’ll get 0,0001 gram of pure gold.
As you have made your choice, check the price and gold amount once again, and press “Quick Buy” button. The costs will be debited from your linked account.
The Buy and Sell prices on Augmont platform are calculated based on wholesale spot market pricing. They are exclusive of GST and other applicable taxes. Those will be added at the final stage of checkout.
The virtual gold you purchased will be stored in your online account, while the equivalent of actual physical gold is kept in safe vaults. Once you decide to get your physical gold, you pay the making charges and request a delivery by verified courier partners. Some providers also offer to exchange DigiGold for jewelry at a store. Most platforms also offer using digital gold as loan collateral.
Other Forms of Digital Gold Investment
Unlike digital gold which can be directly purchased online from the seller or authorized partners, other forms of virtual gold investment may deal with 99,5% pure gold.
These are gold-backed financial products such as gold ETFs, gold-backed funds, multi-asset funds, and government sovereign gold bonds.
Gold ETFs are exchange-traded funds representing physical gold in paper or dematerialised form. One Gold ETF unit is equal to 1 gram of gold.
Gold futures are standardized exchange-traded contracts where the buyer and seller agree to trade a specific amount of gold at a predetermined price on a future date.
Sovereign gold bonds are government securities denominated in grams of gold. Instead of holding physical gold, investors pay the issue price in cash. Sovereign gold bonds (SGBs) are issued by RBI on behalf of the Government of India.
Gold mutual funds are based on stocks of international gold mining companies and other assets exposed to the gold market. They track the price of gold and sometimes can even outgrow the actual price of the precious metal itself.