Indians always bet on gold.
Be it any occasion or a auspicious reason, gold has unmatchable significance in the Indian households. They love to accumulate as much as gold possible through out their lifetime.
For the same reason, gold loving Indians will be intrigued by the title of this blog.
Can gold be bought online safely ?
Can gold be delivered to the comfort of my home ?
Absolutely ! Thanks to the advent of technology, you need not visit a jewelry shop anymore.
This article talks all about it. Buying gold at the ease of your phone, storing it safely and selling it at the market value.
First things first.
The gold you buy online is called as ‘Digital Gold’. Such gold can be bought and sold, anytime, anywhere using internet.
Just download any of these apps and sign-up for free.
Apps like GooglePay, Paytm, Motilal Oswal, PhonePe, Kuvera, UpStox or securities app of your own bank allow you to buy and sell gold. Who knew shopping gold would become as easy as shopping grocery from your phone !
You would have a bewildered question popping already. “I though these apps were payment gateways or trading platforms. Do these apps sell gold for their users ? ”
No. These apps do not sell gold. These apps are just platforms bridging the gap between the buyers and the gold vendors.
Gold sold on these app platform are offered by 3 major gold trading companies in India.
These are –
1. Augmont Gold Ltd.
2. MMTC-PAMP India Pvt. Ltd.
3. Digital Gold India Pvt Ltd
These companies are either in joint venture with the Indian Government or are amongst largest network of bullion dealers across India.
Due to the government supervision, investment in gold through these companies is 100% safe.
Much safer than buying gold jewelry and storing them in secret vaults at homes or at banks.
Moving further in this article, lets debunk a few frequently asked questions.
1 . Why should you prefer Digital gold over Physical gold ?
We all know that gold is an expensive asset.
Why should anyone shell so much money in buying Digital gold (which is seemingly virtual) over having physical custody of gold .
a. Digital gold is much safer than Physical gold as the companies secure them in their safe vault.
The companies are prohibited to withdraw any of your gold unless you order for a sale or delivery.
Also, digital gold does not have the ‘risk of theft’ . If you don’t want the company to handle your gold, sell it, whenever you wish, without worrying about getting a buyer. The company will deposit cash in your ‘linked bank account’ on sale execution.
b. Digital gold is not subject to wastage charges and numerous other charges as physical gold.
Physical gold requires constant maintenance and polishing. Also, the design of physical gold can even get out of fashion.
c. Digital gold is known for its certified purity of 99.5% to 99.9% . This level of purity cannot be achieved in physical form of gold.
I am sure, you know that impure gold holds less value.
d. Physical gold is subject to exorbitant making charges, service charges, design charges and artist commissions. In reality the quantity of gold in a piece of jewelry is not actually worth the billing amount. 30%-40% of the billing amount is made up of these charges.
Whereas, Digital gold is devoid of such charges. Which means, that the quantity of gold that you will receive on buying digital gold is undoubtedly higher than on buying a gold jewelry.
2 . What is the minimum amount required for buying Digital Gold?
You can invest in digital gold at as low as Re 1. Some apps however, require a minimum investment of Rs 10.
3 . What is the maximum amount of digital gold that can be bought ?
Currently, most apps offer a maximum digital gold purchase of Rs. 2,00,000.
4 . Is there a KYC requirement to buy Digital Gold ?
Google Pay requires a KYC for buying digital gold above Rs. 49,999 .
5 . Which is the most user-friendly app to buy Digital Gold ?
Google Pay. It has the most simple and clear user interface to buy digital gold.
Sign-in to your Google Pay app.
Scroll to the middle portion of the app’s homepage.
Find the section ‘Gold’.
Click on it and enter the amount. There will be a section visible stating the milligrams of gold that can be bought/sold for the amount entered.
Buy and Sell as per your wish with in the limits set. Google Pay allows you to buy digital gold up to Rs.99,999.
6 . At what price of gold will my sale order be executed ?
You can liquidate the digital gold bought and get your money at the ‘market price’ of gold on the ‘sale date’.
Market price on the sale date is taken as per the ‘real-time’ gold market prices at the time of transaction
( 5 minutes from the point of initiation of transaction) .
7 . Will GST be applicable on the digital gold purchased ?
Yes. 3% GST over the billing amount will be charged .
8 . What about taxation on sale of digital gold ?
If you sell your digital gold :
<3 years of purchase, a short term capital gain tax is applicable as per your income tax slab rate.
>3 years, a long term capital gain tax will be applicable with an indexation benefit.
9 . How can I covert digital gold and get delivery of physical gold ?
If you wish to obtain physical gold, instead of obtaining cash, choose the ‘delivery’ option on your app. You will have to pay delivery charges and minimal making charges.
Gold bar/ biscuit/ coin will reach your address ! It’s that simple !
10 . Is there a minimum order for physical delivery of gold ?
You will have to order at least 1gm of gold for delivery.
However, each app has stated a minimum amount or quantity , mandatory for physical gold delivery.
Meaning, that you cannot get gold worth Rs 10 home delivered. For home delivery, at least 1gm of gold is to be ordered. Hmm, that’s rational.
Due to the pandemic situation across the nation, physical delivery of digital gold has been paused.
11 . Will I get interest on the money that I park in digital gold ?
No. Digital Gold does not provide any interest on the money invested. However, Sovereign gold bonds provide 2% p.a fixed interest, but they have a lock-in period of 8 years.
Gold price in January 2021 was around Rs 51,900 and as on today 07-05-2021, it is Rs. 48950.
With coming inflation, people will find more comfort in holding gold as an asset.
With inflation and scarcity of cash, it becomes easier to trade gold with other valuable commodities or cash, if need arises.
Prices have fallen and investment in gold is easier, quicker and safer than ever. Pick your phone diversify your portfolio.
Imagine investing Rs 11 for 365 days. You would have Rs 4,015 saved and invested at the end of the year ! Boom !
And not to ignore the fact that, gold prices are mostly appreciating .
A minimum of 10 p.a % appreciation (as of 2020) in your investment can be expected.
Understand the advantages of buying gold online and accumulate the yellow metal a part of your investment portfolio.