Digital gold vs Physical gold. Which is better?

Are you confused between buying digital gold vs physical gold? Gold is an extremely valuable commodity in India – in its physical form, there are jewelry, coinage, and biscuits.

Gold is purchased to mark every momentous occasion. In fact, according to IGPC sponsored by the World Gold Council, more than 75% of Indian households own gold in some form or another. 

But there is a new way of owning gold that is rapidly becoming popular in urban India – which is digital gold. Unlike physical gold, you can purchase digital gold at a minimal cost like Rs. 10 to Rs. 100.

Let’s compare the two and find out which is the best option for you.

What’s Digital Gold? 

Digital gold is a substitute for actual gold. Digital gold is available in India through a variety of apps and websites.

A cost-effective and successful way to invest in gold is by purchasing digital gold. Digital gold is guaranteed by 24K gold that is 99.9% pure. Gold can be purchased for as little as 100 Indian rupees. Online sales and purchases take place at current market rates.  

Consequently, the transaction will be completely transparent. Gold investments don’t require additional transporting or storage expenses.

The security of the gold kept by the businesses in a safe vault under the investor’s name need not be a concern for investors. 

What’s Physical Gold? 

One of the most popular and preferred investment choices in India is buying gold. Interest in this yellow metal has only grown over time.

Gold is typically purchased for personal usage. It can be bought as jewelry, gold coins, or cookies. Without the need for a middleman, one can purchase it directly from a bank or jeweler. There isn’t any counterparty risk as a result.  

With actual gold, the minimum investment is considerable. For instance, there is a 10-gram minimum purchase requirement for gold cookies. As a result, purchasing physical gold requires a larger down payment than purchasing digital gold.

Physical-Gold-vs-Digital-Gold. Which is better

Differences between Digital Gold vs Physical Gold 

1. Digital Gold 

  1. Purity is 99.99% and guaranteed. 
  2. Prices are the same across the world. 
  3. Buy and sell at a fixed price. 
  4. 3% GST is charged at digital gold. 
  5. Safe storage by the seller in a safe vault. 
  6. Gold investment profits are taxed according to the investor’s income tax bracket rates if kept for much less than 3 years.
  7. Profits are subject to a 20% tax liability with an annual inflation advantage for investment holding periods longer than three years. 

2. Physical Gold 

  1. Purity can’t be guaranteed. It may not be or maybe 99.05% pure. 
  2. Physical gold prices aren’t similar. 
  3. The usual gold coin or biscuit weight 10 grams is also available. As a result, purchasing actual gold involves a substantial expenditure. 
  4. When purchasing gold jewelry, making fees range from 20% to 30% of the entire cost of the gold. 
  5. The gold must be kept securely either at home or in a locker. The likelihood of loss and theft is significant. 
  6. Gold investment profits are taxed according to the investor’s income tax bracket rates if held for less than three years.
  7. Gains are subject to a 20% withholding tax with an indexation advantage for investment time frames over three years. 

There are benefits and drawbacks to both physical and digital gold. Rather than purchasing physical gold if you merely desire to use it for financial gain, you can purchase digital gold.

In contrast hand, digital gold is uncontrolled and has a temporal limitation on how long it can be stored in that format. 

Other digital assets, such as sovereign gold bonds and gold ETFs (Exchange Traded Funds), may be better in some circumstances (mutual funds). Physical gold, in contrast, is suited for investors’ personal use. 


Is digital gold worth buying? 

The ease and security of digital gold’s preservation is by far its greatest benefit. The business that sells digital gold will keep the gold that customers buy in safe vaults.

The buyer also avoids locker fees and worries about the theft or loss of gold because he does not own the gold. 

What is the disadvantage of digital gold? 

Within the case of digital gold, an extra fee known as spear cost is levied against the investor. A spreading cost will be added to a number of other prices, such as storage fees and insurance premiums. Typically, the spread cost falls between 3% and 6%. 

Which is better digital or physical gold? 

There are benefits and drawbacks to both digital and physical gold. Instead of purchasing physical gold if you merely want to use it for financial gain, you can purchase digital gold. On the other hand, digital gold is unregulated and has a temporal limit on how long it can be stored in that format. 

Consult an expert advisor to get the right plan

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