Among the many options for investing in gold, digital gold is gaining popularity. As the name suggests, digital gold is a product sold online that allows you to hold gold virtually without the need for a safe or bank locker. The seller maintains an equivalent weight of real gold for each online purchase in a secure vault. It is 24-carat gold, sourced directly from the miners. Digital Gold: Points to keep in mind while investing in digital gold.
Currently, three major organizations provide digital gold in India through partnerships with different apps: Augmont Gold, Digital Gold India Pvt. Ltd. its Safe Gold brand, and MMTC-PAMP (a joint venture between Government of India Undertaking -MMTC and PAMP SA of Switzerland). However there are some things investors should keep in mind while investing in digital gold. Digital Gold: Points to keep in mind while investing in digital gold.
They are as follows:
Choose a trusted platform: Investors should buy gold from an authorized and trusted platform. Typically, a trustee is appointed to verify that the quantity and purity of the gold matches the gold purchased by the investor. However, as there is a gap between investors and regulators to monitor the performance of the trustees they should ensure that they regularly keep a check from the beginning.
Even if independent audits are conducted, the process of selecting the auditors and reviewing the audit reports rests with the gold supplier. Thus, it is absolutely necessary to pay attention to the platform from which to buy or sell digital gold.
Payment of GST: Investors have to pay 3 percent GST while buying physical gold to cover expenses like storage cost, insurance and trustee fees while buying digital gold. For example, if someone spends INR 5,000 on digital gold, they will receive only 4,854 worth of gold. Because the rest is deducted as GST.
Delivery and Making Charges: While buying digital gold investors have the option to exchange it for physical gold and have it delivered to their homes. However, since delivery charges are not included in the purchase value of gold, they have to pay that charge.
Additionally, investors must pay a making fee when converting digital gold into physical gold items such as gold bars or coins. This is very important to remember
Also Read: Airtel vs Jio vs Vi: Bumper plans by Airtel, Jio, VI
Also Read: Good news for Gold buyers: Decrease in gold price
Also Read: Asia Cup 2022: Pakistan Vs Hong Kong: The winning team will face India
Limit on investment period: Digital gold investments have a maximum holding period, after which the investor has to take delivery of the gold or sell it further. Investors have to pay additional charges for collection if delivery is not taken on the due date. So, as they get closer to the due date they should choose the form they want to redeem their digital gold.
Comments are closed.