Is Digital Gold Better Than Gold

A digital gold purchase is an instant online gold purchase which gets credited to your online gold wallet. Simultaneously, an equivalent quantity of 24k gold of 99.99% purity is kept in a secure third-party vault on your behalf. You can, at a later stage, choose to get this digital gold delivered in physical form to your address or you can even sell it digitally without entailing any additional costs.

If you think about digital gold vs physical gold, digital gold beats on almost all fronts. Let’s dig deeper into how it does so!

Digital gold vs Physical Gold

Both digital gold and physical gold have pros and cons. However, the choice of investment depends on the investor. The purpose of investment and the amount of investment are a few factors out of many that should be considered before making an investment in either type of gold. Here's a comparison between the two:

• Costs to buy

Apart from the base price of gold, when you buy gold in physical form, you end up paying additional making costs. This typically ranges anywhere between 5% and 20% of the value of gold. These costs are sunk costs as they can never be recovered.

Digital gold, on the other hand, entails absolutely no making costs especially when you redeem your gold in digital form as well; making it far more lucrative for investment purposes.

• Cost to hold

Once you buy gold, you need to safely store it away. Many people actually end up taking up bank lockers for this. That’s an additional cost, in fact a recurring one, which gets added to your gold purchases.

Digital gold once again entails zero holding costs – you hold it in your digital wallet and your provider holds it for you in a secure vault

• Authenticity

The authenticity of physical gold is often questionable, depending on the genuineness of the selling jeweller. Purity also tends to differ from city to city and jeweller to jeweller.

Digital gold eliminates these fears of authenticity – as it represents certified 24k gold of 99.99% purity.

• Secure the secured

Digital gold adds an additional layer of security. Physical gold is traditionally considered as a ‘store of value’, lending its safety and security. There always, however, exists a fear and risk of loss or theft in physical form.

Once again, digital gold is a step up here – most providers insure the digital gold, which is already securely held on your behalf by third party vault providers.

• Ease of liquidity

When you go to sell your physical gold, it involves authenticity checks and most jewellers offer lower than market rates i.e.: a lower selling price vis-a-vis the purchase price.

Digital gold can be easily sold online, 24/7 and at real time prices. This means you not only buy hassle-free but can also sell hassle-free.

• Affordability and versatility in use

Traditional gold is usually offered in gram multiples – 1gm, 5gm, 10gm and so on. At today’s price, this means you need a minimum of Rs.5,000 to actually invest in gold and multiples thereof.

Digital gold is ‘affordable to all’. It can be bought in extremely small quantities- as low as Rs.100. In fact, most providers offer a convenient SIP option as well for this.

This makes digital gold amenable to many uses – from self-purchase, to investment and gifting purposes where you may not actually have a budget of buying several grams of physical gold.

Conclusion

Keep in mind, when the question is of digital gold vs physical gold, digital gold takes the lead as it offers all these benefits in addition to the core benefits, that, in itself make gold a valuable investment. So, at every step of the way – from when you buy, to when you hold, to when you ultimately liquidate – Digital golds wins all the way!

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