Steps to buy digital gold from banks and other fintech i.e. Paytm, PhonePe etc. – Investment in Gold is very easy now a days, there are few option you can take – you can invest via gold exchange-traded funds (ETFs), gold mutual funds, physical gold like coins and bars, Sovereign Gold Bonds (SGBs) and now digital gold.
Our love for Gold is known to the world, to cash in on our thirst for gold, mobile eWallet companies like Paytm, PhonePe, Google Pay etc. have started offering Digital Gold. All these companies are selling gold in tie up with Government undertaking MMTC-PAMP or SafeGold. Similarly, Banks are also offering Digital Gold in the form of Sovereign Gold Bonds (SGBs). Almost all the top banks in India SBI, Canara Bank, PNB, HDFC, Union Bank, ICICI, Axis Bank, Kotak Mahindra etc. are offering purchase of gold through online platforms or Internet banking. Many banks are also offering through Mobile Banking applications also.
if you want to invest in digital gold here are a few things you must know
Key Highlights :
Where to Buy Digital Gold :
You can buy gold online via mobile ewallets such as Paytm PhonePe, Google Pay and under the Gold Rush Plan of Stock Holding Corporation of India. All these gold buying options are offered either in association with MMTC-PAMP or SafeGold or both.
Purity of the Digital Gold:
Both, MMTC-PAMP and SafeGold, offer gold of 24 KT. Further to say , MMTC-PAMP offers gold of 99.9 percent purity whereas SafeGold offers 99.5 percent purity. Fineness is nothing but the weight of gold in proportion to total weight (inclusive of alloy and impurities). It is expressed in units of parts per 1000. According to World Gold Council’s website, even ‘pure’ gold can contain minute amounts of impurities that the manufacturer can’t remove.
Safety of Digital Gold:
The gold purchased by you from these companies are kept in a vault which is fully secured for all the eventualities.
How long one can hold Digital Gold:
This is important to know before buying Digital Gold – If gold is bought from the MMTC-PAMP platform, then there are no storage charges. One can keep gold for maximum for five years. However, after five years, you are required to either convert it into gold coins or sell it. To avoid making your account inactive, you are required to do one transaction in at least every six months.
Similarly, if you are buying gold from SafeGold using PhonePe, then it is likely that you might have to pay storage charges.
These are charged as follows:
- No charges for the first two years.
- If the amount of gold is less than 2 grams at the end of two years from the date of your first purchase, then a fee of 0.05 per cent per month is charged.
- The fee will be deducted at the end of every month from your gold balance.
- The gold can be held for maximum of 7 years.
Features of Digital Gold on PhonePe
a) PhonePe offers buying of gold from both MMTC-PAMP and SafeGold. You can buy gold from Re 1 or 0.001 grams. However, to sell it, one must have minimum gold worth of Rs 5. You cannot buy and sell Gold on the same day.
b) The gold rate quoted on the app includes custom duties and taxes. There is a differential quoted by MMTC-PAMP and SafeGold due to difference in gold in terms of fineness.
c) The live rate of buying valid for 5 minutes and selling rate for 4 minutes.
d) Currently, non kyc verified account on PhonePe can accumulate Digital Gold up to Rs 2 lakh at any point. To accumulate more, you will be required to undergo the KYC requirements.
e) One can buy gold from both the platforms. Each locker will be separately maintained by them.
f) Conversion of gold into coins/pendants starts from 1 gram. You will be required to pay delivery and making charges, as applicable.
Note : As per reported by PhonePe website and ET :
Features of Paytm’s Digital Gold
a) Minimum value to buy gold on Paytm starts from Re 1 to maximum of Rs 1.5 lakh. In grams, you can buy a minimum of 0.0005 grams and a maximum of 50 grams.
b) Selling of gold starts from 0.0005 grams or Rs 1. The live price is valid for 7 minutes to complete the transaction.
c) Additional charges will be levied for custody after five years.
d) As per Paytm app, you must have a minimum balance in your digital gold account to convert it into coin. MMTC-PAMP coins start from 0.5 gram while Augmont coins start from 0.1 grams.
e) Now customers on Paytm can redeem their digital gold by converting it into jewellery through Kalyan Jewellers, PC Jewellers
GoldRush from Stock Holding Corporation
a) Buying of gold starts from Rs 100 and thereafter in the multiples of Re 1. There is no limit on the maximum amount you can invest. However, if the purchase amount exceeds Rs 50,000, then PAN card copy will be required.
b) To buy gold from Stock Holding, you will be required to open an account and complete the KYC process. No registration fees. The form for opening the account is available on the Stocking Corporation website , Click Here
c) Settlement of the account will be done via physical delivery of gold. The physical delivery of gold starts from 1 gram in the form of gold coins or bars. To convert fractional units into next full gram, you have to pay additional money and other charges, if any.
d) e) Withdrawal of gold starts from 1 gram of gold. Making and delivery charges will be additional.
f) There is no limit on the quantity of gold you can accumulate.
Sovereign Gold Bond Features
Hassle free: Ownership of gold without any physical possession (No risks and no cost of storage)
Tax treatment: The capital gains tax arising on redemption of SGB to an individual has been exempted. The indexation benefits will be provided to long term capital gains arising to any person on transfer of bond.
Tradability: Bonds will be tradable on stock exchanges within a fortnight of the issuance on a date as notified by the RBI.
Transferability: Bonds shall be transferable by execution of an Instrument of transfer in accordance with the provisions of the Government Securities Act.
Eligibility: The bonds will be restricted for sale to resident Indian entities including individuals, HUFs, Trusts, Universities and Charitable institutions. For online application through Banks, the bonds are for sale to only ‘individuals’ through the Internet Banking Channel and Mobile App. Customers falling into other category of investors may however approach the branch and fill-up the application form to apply for the tranche.
Denomination: The bonds will be denominated in units of one gram of gold and multiples thereof.
Minimum size: Minimum permissible investment will be 1 gram of gold.
Maximum limit: Maximum limit of subscription shall be of 4 kg for individuals, 4 kg for Hindu Undivided Family (HUF) and 20 kg for trusts and similar entities notified by the government from time to time
Interest rate: The investors will be paid Interest on the amount of initial investment at the rate notified by RBI for a particular tranche at the time of its launch and is payable semi-annually.
Tenor: The tenor of the bond will be for a period of 8 years with an exit option from 5th year onwards to be exercised on the interest payment dates.
Redemption: Redemption price shall be fixed in Indian Rupees and the redemption price shall be based on simple average of closing price of gold of 999 purity of previous 3 business days from the date of repayment, published by the India Bullion and Jewelers Association Limited.
*May change from issue to issue
Which one your should purchase ?
Digital gold is a convenient way to invest in gold. However, while deciding on which provider to opt for, you should compare the various features and charges on the product. Additionally, you must look after your investment requirements. As in case of SGB, this can be kept as additional security in the form of collateral with the banks for any type of Loan. But in my opinion, the Digital Gold is better option for investment than physical gold.