Digital gold and physical gold are two popular investment options in India, but they come with their own set of advantages and disadvantages. It’s important to understand the differences between Digital gold Vs Physical Gold.
Here are some pointers to consider when comparing digital gold and physical gold:
Have you ever been in a jewellery store and felt overwhelmed by the options? You want to purchase that enormous piece of jewellery, but you cannot locate the necessary funds in your pocket. Or perhaps you don’t want to spend money on making charges. You are probably afraid of its cleanliness or the possibility that it will become impure in the future. You then wish that purchasing the yellow metal might be done more simply.
This is where electronic gold, sometimes known as digital gold, comes in.
Comparing Digital Gold Vs Physical Gold
The topic of Digital gold vs Physical Gold has been debated for long, especially by investors. Here are a few factors which compare the two. (Read our article on the safety of digital gold here.)
Convenience:
Digital gold is easy to buy and sell, and can be done from the comfort of one’s home. Transactions can be done quickly and easily, and there is no need to physically store or transport the gold. Some of the best digital gold investment apps are JAR, mobikwik, Paytm etc.
Physical gold, on the other hand, requires the physical possession of gold in the form of coins, bars, or jewellery.
Liquidity:
Digital gold can be traded 24×7, unlike physical gold which is available during specific working hours.
Physical gold has a wider market compared to digital gold, which can limit the options for selling or trading.
Purity:
Physical gold is often sold with a purity certificate, which guarantees the quality and purity of the gold.
Digital gold, however, may not have the same level of guarantee, and it is important to research and choose a reputable platform or app to buy digital gold from.
Taxes:
Physical gold is subject to a making charge, which is a percentage of the value of the gold.
Digital gold is subject to GST at the time of purchase.
Additionally, physical gold is also subject to wealth tax if the value of the gold exceeds a certain limit.
Tangibility:
Physical gold is a tangible asset that can be held, stored, and even used as collateral for loans. It provides a sense of security and control over one’s investment.
Digital gold, on the other hand, is stored electronically, it’s a digital representation of physical gold.
Where does Digital Gold win?
- In terms of convenience, digital gold is a clear winner. Transactions can be done quickly and easily, and there is no need to physically store or transport the gold.
- This makes it an attractive option for many investors who are looking for an easy and convenient way to invest in gold.
- Additionally, digital gold can also be traded 24×7, unlike physical gold which is available during specific working hours.
- When it comes to taxes, physical gold is subject to a making charge, which is a percentage of the value of the gold, while digital gold is subject to GST at the time of purchase.
- Additionally, physical gold is also subject to wealth tax if the value of the gold exceeds a certain limit.
Where does Physical Gold win?
- Physical gold, however, has certain advantages over digital gold. It is a tangible asset that can be held and stored securely, which provides a sense of security and control over one’s investment.
- Additionally, physical gold can also be used as collateral for loans and can be sold or pawned in case of an emergency.
- When it comes to liquidity, physical gold has a wider market compared to digital gold, which can limit the options for selling or trading.
- Additionally, the price of digital gold is also dependent on the platform or app from which it is bought, and can vary from platform to platform.
- Another important aspect to consider is the purity of gold. Physical gold is often sold with a purity certificate, which guarantees the quality and purity of the gold. Digital gold, however, may not have the same level of guarantee, and it is important to research and choose a reputable platform or app to buy digital gold from.
- Digital gold buying apps like JAR, Paytm and Safegold come a long way.
Conclusion:
Both digital gold and physical gold have their own set of advantages and disadvantages. It is worth investing in digital gold as well as physical gold. Physical gold offers the security and control of a tangible asset, while digital gold returns convenience and liquidity of a digital asset.
Ultimately, the choice between the two will depend on an individual’s investment goals, risk tolerance, and personal preference. It also depends upon the price of digital gold and physical gold. The topic of digital gold vs physical gold is debated until today and a lot of investors have contradicting views on the same.
Jar is a microfinance digital gold investment app which helps you save and invest in digital gold. It invests spare change from your regular everyday transactions. It is one of the simplest and fastest ways to grow your wealth using digital gold.
With Jar, buying digital gold is a much simpler and streamlined process. You can buy and sell digital gold starting from just rupee 1! So, what are you waiting for? Start your journey towards wealth with digital gold today with JAR!