Indians love gold . We buy the it for consumption and for investment. For investing in gold, there are few routes you can take – you can invest via gold exchange-traded funds (ETFs), gold mutual funds, physical gold like coins and bars, Sovereign Gold Bonds (SGBs) and now digital gold.
what is digital gold ?
To cash in on demand for gold, mobile wallets like Paytm, PhonePe ,google pay ,etc. have started offering digital gold. .Motilal Oswal Investment Services is selling digital gold via its product Me-Gold. So, gold will be purchased, stored under your name ,kept in a vault and will be deiposed to you on demand. A customer might need to pay for storage charges or some other fee for their gold on a monthly or a yearly basis.
who is offering digital gold ?
one can buy gold online via mobile wallets such as Paytm PhonePe and under the Gold Rush Plan of Stock Holding Corporation of India. these gold buying options are being offered either in association with MMTC-PAMP or SafeGold or both.
MMTC-PAMP is a joint venture between government-owned MMTC and Switzerland-based PAMP SA.
SafeGold is a digital platform that has tied up with various mobile wallet apps allowing customers to buy, sell and receive vaulted gold frofrom as low as Re 1
Purity of such online digital gold
: Both, MMTC-PAMP and SafeGold, offer gold of 24KT. However, in terms of fineness, MMTC-PAMP offers gold of 99.9 percent purity whereas SafeGold offers 99.5 percent purity.
what is fineness ? it is as the weight of precious metal such as gold in proportion to total weight (inclusive of alloy and impurities). It is expressed in units of parts per 1000. According to World Gold Council’s website, even ‘pure’ gold can contain minute amounts of impurities that the manufacturer is unable to remove.
Safety: The gold purchased from these platforms is kept in a vault which is fully secured for all the eventualities.
How long you can hold to digital gold
If gold is bought from the MMTC-PAMP platform, then there are no storage charges. One can keep digital gold for maximum for five years. However, after five years, customer is supposed to either convert it into gold coins or sell it. To avoid making your account inactive,a customer is required to do one transaction in at least every six months.
Similarly, if a customer is buying gold from SafeGold using PhonePe, then it is likely that he might have to pay storage charges. These are charged as follows: No charges for the first two years. If the amount of gold is less than 2 grams at the end of two years from the date of your first purchase, then a fee of 0.05 per cent per month is charged. The fee will be deducted at the end of every month from your gold balance. The gold can be held for maximum of 7 years.
Features of PhonePe Digital Gold
PhonePe offers buying of gold from both MMTC-PAMP and SafeGold. Buying of gold starts from Re 1 or 0.001 grams. However, to sell it, one must have minimum gold worth of Rs 5. You cannot buy and sell on the same day.
The gold rate quoted on the app includes custom duties and taxes. There is a differential quoted by MMTC-PAMP and SafeGold due to difference in gold in terms of fineness.
The live rate of buying valid for 5 minutes and selling rate for 4 minutes.
Currently, one can accumulate up to Rs 2 lakh at any point.
To accumulate more digital gold, you will be required to undergo the KYC requirements.
One can buy gold from both the platforms. Each locker will be separately maintained by them.
Conversion of gold into coins/pendants starts from 1 gram. You will be required to pay separate delivery and making charges..
The gold coin or a pendant would be delivered in tamper proof packaging
features of Paytm’s Digital Gold
Minimum value to buy gold starts from Re 1 to maximum of Rs 1.5 lakh. In grams, you can buy a minimum of 0.0005 grams and a maximum of 50 grams.
Selling of gold starts from 0.0005 grams or Rs 1. The live price is valid for 7 minutes to complete the transaction.
Additional charges for custody after five years.
At the time of sale, you will be required to provide your bank account and IFSC code details. Money will be credited into your account within 72 hours.
as per their website FAQ ,the the selling price is lower than buying price because there are certain costs which include taxes, bank charges and others.
A customer can send gold as a gift to your loved ones.
Paytm tied up with jewellery stores such as Kalyan Jewellers, PC Jewellers and others so that customers can redeem their digital gold by converting it into jewellery.
Digital Gold purchase from Stock Holding Corporation
a) Buying of gold starts from Rs 100 and thereafter in the multiples of Re 1. There is no limit on the maximum amount you can invest
However, if the purchase amount exceeds Rs 50,000, then PAN card copy will be required.
To buy gold from Stock Holding, you will be required to open an account and complete the KYC process. No registration fees. The form for opening the account is available on the Stocking Corporation website ..
Settlement of the account will be done via physical delivery of gold. The physical delivery of gold starts from 1 gram in the form of gold coins or bars. To convert fractional units into next full gram, you have to pay additional money and other charges, if any.
The gold purchased on your behalf will be kept in a fully secured vault and gold will be credited into your metal account the next day once the payment is received.
Withdrawal of gold starts from 1 gram of gold. Making and delivery charges will be additional.
There is no limit on the quantity of gold you can accumulate.
FAQ on digital gold
What you should do for investing in digital gold
Digital gold is a convenient way to invest in gold. However, while deciding on which provider to opt for, you should ideally compare the various features and charges on the product. FINANCIAL goals should be clear to the investor as there may be certain Further, as the features of different gold and gold-based investment options available in the market vary quite a bit, buyers need to evaluate these vis-à-vis their needs and financial goals before investing.
Is it worth buying digital gold?
If you are to invest in gold, then the best option you have is digital gold. This is 24K 99.9% pure gold, and there is no chance of losing this. It does not come with charges such as making and wastage charges. You don’t have to worry about safety, and it is easy to buy and sell
Is it safe to invest in digital gold?
Like most other gold investment instruments, Digital Gold as an investment option is safe. Every gram of gold accumulated in your account is backed by actual physical gold. This means that at any given time in future, there will be no proportionate risk for you.
Is it good to buy gold from PhonePe?
The most important things to consider when buying Gold online is to ensure the platform is secure, they offer fair pricing and the Gold sold is of necessary purity and standard. At PhonePe we can assume it be safe as it is one of the most renowned online names in India.
Can I convert Paytm gold to cash?
You can continue to transact and shop on Paytm and still receive cashback as equivalent “Digital Gold” of the same amount. … Sell your existing Paytm Gold at market prices and get the money credited directly to your Bank account.
Why is MMTC PAMP gold expensive?
This is due to various transaction related costs including taxes, bank charges for processing your payment, technology costs and hedging costs since the market prices may fluctuate between customer placing order and MMTC-PAMP buying the gold.