Investing in gold on Diwali
In India, gold is not only jewelery but also a popular means of investment. During festivals like Dhanteras and Diwali, people traditionally buy gold jewellery, coins and bars. But in the last few years, the trend of buying digital gold i.e. gold online has also increased rapidly. Let us know what could be best for you among these two options amid rising prices.
physical gold
Physical gold i.e. jewellery, coins or gold bars has its own charm. You can wear it, give it as a gift and it also gets profit if its value increases. But depending on the investment, some additional expenses are also added to it like making charges, GST, locker charges. Along with this, there is also a risk of theft. All these factors can affect your returns.
digital gold
The biggest advantage of digital gold is that it can be purchased for just Rs 10. No making charge has to be paid for this. It is kept in secure safes and you will have digital proof of it (custody receipt). You can sell it online 24×7. So, if you want to invest small amounts and want instant liquidity, digital gold can be a great option.
Total Cost Comparison: Which is Economical?
Digital gold is not completely free, it involves an annual charge of 3% GST and sometimes up to 0.30.4%. But these charges are transparent and predictable. On the other hand, physical gold becomes more expensive due to making charges, GST and locker charges etc. Therefore, accessing digital gold can prove to be easy and cheap for small investors.
What is better in investing big money?
If you want to invest an amount of ₹2‑3 lakh or more in gold, physical gold bars or coins may be more affordable provided they are from a trusted source. But if you want to invest an amount ranging from ₹100 to ₹10,000 regularly, then digital gold is a suitable option for your convenience and liquidity.
Talking about liquidity
The biggest plus point of digital gold is its instant bond-correction ability. You can sell instantly through the platform on the app or website and withdraw the money into your bank account. But when selling physical gold, you may have to face problems like purity testing, price cut, buyback time etc. Therefore, digital gold is ahead in terms of liquidity.
Security and Trust: Who is Safe?
Digital gold is kept safe in safes and undergoes independent audit. The investor does not have to worry about theft or locker keys. But the responsibility of security depends on that platform and its reliability. At the same time, physical gold remains at risk of theft, loss or maintenance due to it being in your possession.