Read this before buying Gold Online: Gold investment has been a popular way of investment over decades but investing in digital gold has its benefits. Be it any festival, gold investment is a ritual for many Indians. Digital gold has become more prevalent than real physical gold nowadays.Here there is no physical gold possession with the investor but they hold an investment that can be redeemed when needed. This blog speaks about digital gold online and the various types of investment options available. And also highlights why sovereign gold bonds are a better online gold investment option.
Here is more point you need to read this before buying Gold Online.
What is Digital Gold?
The concept of investing in gold through an online platform, where you can buy, sell, or hold commodities. It is a convenient and cost-effective investment option as compared to physical gold. Unlike physical gold it has no making charges, it is a secure option, and also offers liquidity. Digital gold is available on various platforms and has no chance of fraud. It is a good idea as it is cost-efficient and the most effective way of investing in gold online.
Different ways of investing in gold online:
Investment in digital gold can be done in various ways like through digital platforms, Gold ETFs, and SGBs: Let’s understand in detail how you can make money from digital gold.
Digital Gold via Online Platform: Various user-friendly platforms are available that help the user to buy, sell, or even hold digital gold. Users can conveniently buy gold online and sell it whenever they want. The best part about it is that you get pure 24-carat gold that is stored in MMTC-PAMP which is highly secured. In the case of physical gold, you have to pay making charges but not in digital gold online. You are supposed to pay 3% GST on the investment amount. In short, we can say that digital gold is real gold, with 100% purity.
Gold ETFs: Another highly used method of buying gold is Gold ETFs. It refers to exchange-traded funds which make investment in gold easy. So if you’re interested in buying gold through the stock market, then you can try gold ETFs or mutual funds schemes that track the movement of gold prices. This method provides transparency about gold prices and also promotes liquidity and the plus point no physical storage is needed.
Sovereign Gold Bonds (SGBs): There are some bonds which are issued by the government of India are known as SGBs- Sovereign Gold Bonds.They are known to be a good replacement for physical gold. Here no physical gold is purchased but only a bond is bought. When you buy SGBs, your investment gets linked to the actual value of gold. So when the price of gold increases, the value of your bond also increases. SGBs are better than physical gold at any point in time.
Why are SGBs better than the other two investing options?
SGBs are known for safety, simplicity, and asset diversification. There are a handful of factors that make it a better investing option for digital gold online. Refer below to know the key highlights of why SGBs are better than others:
Fixed Returns: Once you start investing in SGBs you can surely enjoy 2.5% extra fixed income over your investment. The returns are fixed and stable throughout the investment which is for 8 years. The last interest amount is paid with the maturity amount towards the end of 8 years from the day of commencement.
Backed by Government: SGBs are the most safe investment for those who want to invest in gold online. As these are issued by the Reserve Bank of India, they are highly safe and secure. Leaving no chance for fraud. Whereas the other two options have no security by the government.
Tax-Friendly: The amount that is received at the time of redemption is tax-free. That is the capital gain tax is exempted from tax liability. If you hold SGBs till maturity then, you are supposed to pay no tax. This tax-friendly nature of SGBs makes it a good option for investors. Especially for those who are looking for a long-term tax-efficient investment option.
Used as Collateral: Another benefit of SGBs is that one can use them as collateral when they need a loan. SGBs are more than just buying gold, one can take loans from banks, and other financial institutions. Accessing cash when needed by using the SGBs as a security. However, the loan-to-value ratio set up by the RBI has to be applied to SGBs.
Open to All: SGB investments are open to everyone, be it individuals, HUF, institutions, charitable organizations, and trusts. Here nomination is also possible and both single and joint holdings are allowed here. Whereas gold ETFs allow only individuals to invest.
Final Words:
Digital gold online offers a wide variety of options, but one should always go for a secure and rewarding option. In such cases, sovereign gold bonds surely grab the attention. SGBs provide ownership, avoid storage space, and offer fixed returns. Even though other investments offer more flexibility, SGBs are backed by government security. If you plan to invest in digital gold online, then there are plenty of options. But let’s not forget that SGBs can give you a blend of growth and security.
