All You Need to Know About Buying Gold Online

Know About Buying Gold Online

In today’s modern world, with rapidly growing science and technology, gold is no longer used as currency, although it is used as a form of money like in previous times. In fact, gold has been, for more than 3000 years, a store of money in many parts of the world. The people of India have found a new way to buy gold online. Digital gold is gaining popularity among numerous investors as they feel it is the best option to buy gold online.

Due to the restrictions imposed by the government in concern with the coronavirus, people are hesitant in stepping out to visit the jewellery stores to buy gold. Thus, gold buying online has become a solution for many buyers. This article provides you with an insight on how and where to buy gold digitally?

Where to Buy Gold from Digitally?

During the current time amidst the pandemic, only a few companies provide an option to buy gold online digitally in India. They are:

  • Digital gold India Pvt/Ltd with its SafeGold brand.
  • Augmont Gold Ltd.
  • A joint venture between a Swiss firm MKS PAMP and a state-run MMTC Ltd, the MMTC-PAMP India Pvt. Ltd.

Which is the Best Digital Platform to Buy Gold Online?

In India, there are many options where you can buy gold online from. You can invest in digital gold from various e-wallets like G-pay, Paytm, and PhonePe.  All these e-wallets and companies offer the best option to buy digital gold under the gold rush plan of the Stock holding corporation of India. 

These applications and websites only provide a platform for trading to the metal from companies like SafeGold and MMTC-PAMP. Once you have invested your money, these companies purchase physical gold of the equivalent amount and store them in secret vaults under your name.

Now that we know where we can invest in digital gold, let us carefully consider the steps to invest in various online platforms.

Can I Buy Gold Online from PhonePe?

One of the best options to buy gold online is from PhonePe. The features of investing in this online platform are listed below:

  • The PhonePe application allows you to buy gold from both MMTC-PAMP or SafeGold. You can buy gold starting from 1 rupee or 0.001 grams of gold. 
  • However, to sell the gold, you must have a minimum gold of at least 5 rupees. Plus, you cannot sell on the same day you made the purchase. 
  • The rate of gold shown in the application is inclusive of both custom duties and taxes. 
  • The rates of MMTC-PAMP and SafeGold are different due to the difference in the fitness of gold.
  • You can buy from both companies at the same time through the PhonePe application. Both will have separate lockers in your name. 
  • You can accumulate a maximum of 2 Lakhs at a time. Accumulation of more amounts will require KYC documentation. 
  • The conversion of gold starts from 1 gram into pendants of coins. You will have to bear the making and delivery charges as applicable. 
  • The item will then be delivered to your doorstep with complete security and in tamper-proof packaging.
  • You can buy gold online starting from 100 rupees.
  • There is no maximum limit however, after the amount exceeds 50000 rupees, a copy of the PAN card will be required.
  • To buy gold from the Stock holding corporation, you need to open an account and complete the KYC formalities. 
  • There is no limit on the amount of gold you can hold in the Stock Holding. 
  • The withdrawal of gold starts from as low as one gram, although additional making and delivery charges are levied. 
  • The gold will be physically delivered.

What is Digital Gold?

Amid a pandemic, it’s not at all safe to go out and buy gold from stores. Also, buying physical gold has certain drawbacks. Knowing the purity and legitimacy of the gold, storing and keeping the gold are a few of the issues. 

Digital gold is a more modern way to buy gold online. It is a safer method as the gold is purchased online and kept in secret vaults by the seller on the customer’s behalf. The only requirement is an internet connection and a device to buy gold digitally anytime and from anywhere.

What are the Benefits of Investing in Digital Gold?

Digital gold is the modern way of buying and investing in gold. There are some benefits of trading in digital gold. They are as follows:

  • The physical delivery of gold is made at your doorstep, so you need not go out during this time of the pandemic.
  • The minimum amount of investing in digital gold is as low as 1 rupee.
  • The gold kept digitally can be used as collateral for your online loan. You need not worry about going to the bank to give collateral proof.
  • The gold is stored safely and is also 100 percent insured. This makes you tension-free.
  • The gold is genuine and the purity of gold is 24 Karat.
  • Digital gold can be redeemed in the form of physical gold like gold coins, gold jewelry, or bullion.

For How Long can you Hold the Digital Gold?

If you buy gold from MMTC-PAMP, there are no storage charges, plus you can keep the gold for a maximum of 5 years. To avoid the deactivation of your account, you must do a transaction once every six months. After the completion of 5 years, you are required to sell the gold or convert it into gold coins. 

On the other hand, if you buy gold online from SafeGold, there are some charges which you need to bear. You can keep the gold for a maximum of 7 years.

No charges are incurred for the first two years. If the amount of gold is less than 2 grams at the end of two years, then a fee of 0.05 percent is charged per month. The prices are deducted from your gold balance at the end of every month.

What are the Drawbacks of Investing in Digital Gold?

There are advantages and disadvantages to everything you do. Similarly, investing in gold digitally also has some drawbacks. They are as follows:

  • The maximum amount that can be invested is 2 Lakhs on any platform.
  • The delivery and making charges are also levied while withdrawing the gold.
  • No official government-run body like the RBI or SEBI is involved. 
  • The gold storage time is limited by the companies after which you need to sell the gold or take the physical delivery of gold.

How to Trade in Digital Gold?

During the time of pandemic also the gold market is touching heights. The price of gold increases daily. With the increasing costs of gold, it is a good time to invest in it. According to data, the gold prices last year went from 39,100 in January to a high of 52,300 in October. With a 33 percent return, a gold market is a sure place for investors to invest their money in.

For the trading of digital gold, you can visit many websites like Groww, HDFC Securities, Motilal Oswal, etc. The following steps are required for trading in digital gold.

  • You need to enter an amount in INR to buy gold. You can buy gold for a fixed amount according to your budget.
  •  You can also enter the quantity of gold you want to buy in grams. You can buy gold according to the weight of the metal at the live rate of gold in the market.
  • You need to complete the Know your customer (KYC) form first.
  • After completing the formalities required for the KYC form, you will have to make payment.
  • Multiple payment options such as adding an account, card, net banking, or e-wallets are available.
  • Your gold is stored in a secured locker.
  • The account is updated instantly and can be accessed by you 24/7.
  • You can sell your gold whenever you want to according to your needs or requirements. The gold can be sold to the platform itself whenever you want to.
  • If you do not wish to sell the gold digitally, you can request a doorstep delivery of your gold.
  • Collect the gold physically at your doorstep in the form of gold coins or billions.
  • The delivery fees are applicable accordingly.

How is the Purity of Gold Determined?

The fitness of gold is defined as the weight of gold in proportion to the alloy. Both the companies, MMTC-PAMP and SafeGold, provide 24 Karat gold, but the fitness varies. The MMTC-PAMP offers 24 karat gold of 99.9% purity, whereas SafeGold offers 24 karat gold of 99.5% purity. 

According to the World Gold Council, even pure gold can contain tiny amounts of impurities that any manufacturer cannot remove.

How can Gold be Used During a Crisis?

Let us take the example of the recent coronavirus crisis. The nationwide lockdown which was imposed was a boon for many people in business and other professions. With less income and more expenses, the burden was increasing on the commoner. Thus, the government and the RBI had to increase the spending limit while keeping in mind to lower the debt levels. This meant that more money was to be put in the hands of the people with more money supply. The fear of inflation grows as the oversupply of capital reduces the purchasing power of the currencies. 

In such times, gold acts as an asset and helps in preserving the purchasing power of the currencies which are falling. The increased demands for gold come with an increase in gold prices resulting in the weakening of inflation or purchasing power of the money. 

Thus, during times of crisis, gold comes as a savior. 

  • Gold as a form of our investment portfolios could make up a small portion, but there are many more options for investing gold. Investing in gold exchange-traded funds or sovereign gold bonds are much better options than investing in gold digitally. 
  • Gold as an investment must be a part of long terms to give better profits. Thus, it is always better to invest in gold bonds as they pay 2.5 to 3 per cent as an additional interest to the investor. 
  • For a shorter period of time, investing in gold exchange-traded funds is a better option under SEBI, a regulatory body.

Investing in digital gold is also a convenient way. But there are few factors which should be kept in mind. The company Augmont Ltd saw an increase of 40 to 50 per cent in its business during the period of nationwide lockdown. While deciding which provider to buy from, you must compare various features and charges on different products. As there are other investment options available in the market of investing gold, the investors need to evaluate all the factors according to their budget and needs before making any solid investment. 

Digital gold would make an attractive investment for those who prefer investing in gold once a regulatory body is appointed and the investment limit of 2 lakhs is removed.

Read More: Where should you buy gold, online or offline?


Is it safe to invest in Digital gold?

During the time of the pandemic, unemployment has increased tremendously. With the increased unemployment, there is a high risk of your gold being stolen if you buy it from a store. Thus, buying gold online is definitely a secure option. You need not step you to go to a store, and your gold is also stored in secured vaults with insurance.

What is the purity of the gold bought digitally?

The purity of gold while buying digitally is not an issue. The digital gold is 24 Karat. Although it may vary from company to company, it is assumed to be 100 percent pure.

What is the maximum amount for which digital gold can be bought?

The maximum amount is currently limited to only 2 lakh rupees which can be seen as a drawback. Once a regulatory body is involved like the SEBI, the limit will be increased.

What are the different options to sell your digital gold?

Many options are available to sell digital gold. The gold can be sold directly to the company from where you purchased it. If you do not wish to sell the gold, you can get doorstep delivery of your gold in different forms like gold coins, jewellery, or bullions.

  • Super Quick & Easy
  • Stamped & E-Signed
  • Delivered Directly in Mailbox

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