Digital gold vs physical gold: Which investment option is better this Diwali?

Experts say that both physical gold and digital gold are good options depending upon the requirements of an investor.

Investing in digital gold gets you rid of the storage and safety issues.

Digital Gold vs Physicla Gold: Over the years, investment options have evolved and now you have the choice to invest in gold sitting at home. You can invest in physical gold like gold jewellery or gold coins or digital gold through various online portals. However, when it comes to investing in digital gold, not many people are aware and they prefer to invest in yellow metal's physical form. Experts, however, say that both physical gold and digital gold are good options depending upon the requirements of an investor.

"Physical gold and digital gold both are good options depending upon the requirements of an investor. Jewellery consumption will always be in physical form whereas, for financial purposes, it’s better to go for digital gold. If the sole purpose of purchasing gold is for investment, it’s beneficial to invest in digital gold instead of physical gold. Digital gold is cost-effective, requires no storage and is easy to redeem," said Amit Gupta, MD, SAG infotech.

Gupta said that though digital gold is unregulated, it’s safe as an RBI-regulated trustee backs the gold, and the vaults are insured against theft and natural disasters.

Naimisha Rao, Co-founder, Gullak, said that digital gold involves a customer buying gold digitally and an equivalent amount of that is stored in secure insured vaults. "So, digital gold is always backed by physical gold. Hence there’s no difference in price as well in the case of physical vs digital gold. Also, a person need not worry about storage while investing in digital gold as these are safely stored in insured vaults at no additional cost," said Rao.

Thus, investing in digital gold gets you rid of the storage and safety issues. Digital gold also offers some other advantages over physical gold and some of them are:

* Easy to buy: You can buy digital gold for as low as Rs 10 in less than 2-3 clicks on an app, all at the convenience of your home. You can also plan periodic micro-investments in gold that will help you save more over time.

* Purity: Digital gold is 24K 999 pure gold and the same is NABL BIS certified. The purity is always guaranteed in the case of digital gold

* Easy and hassle-free liquidity: The investment in digital gold comes with no lock-in periods. You can withdraw the digital gold as cash anytime or also get the equivalent amount of physical gold delivered to your doorstep. 

There are many platforms including MMTC-PAMP, PhonePe, Gullak, Paytm, Tata's Tanishq and PC Jewellers that offer digital gold through their websites/apps.