The BRICS TimesInvesting in digital gold has soared in popularity in recent years. However, many investors remain unaware of its risks. Therefore, you must invest money in digital gold very carefully.
Investing in digital gold has become an easy and popular method in recent years. It is an online medium allowing you to buy gold for as little as ₹10 or ₹100. Platforms like PhonePe, Paytm, and Google Pay offer digital gold investment. They collaborate with companies like MMTC-PAMP and Augmont. Additionally, several jewelry brands, such as Tanishq, also provide this investment option.
Why Is Digital Gold Gaining Traction?
Investing in digital gold is straightforward. You can quickly buy or sell gold within minutes using various mobile apps and online platforms. Another reason for its growing interest is the convenience of investing from home.
A key feature is eliminating worries about securely storing the gold. It is ideal for those who want to benefit from the rising price of gold. However, there are risks involved. Your money might get stuck if you use the wrong platform or ignore the regulations. Failing to exercise caution while investing could lead to significant losses. Before investing, you must consider certain factors. For example, check if the platform is legal and understand the company’s policies.
Do Not Trust Everyone
Digital gold is available on many online platforms and wallet apps. However, you cannot trust every provider. Some platforms only act as intermediaries and do not hold gold stock. If the company’s server goes down, or the platform faces legal trouble, your investment could sink.
Before investing, check if the company is approved by the RBI or market regulator SEBI. Always rely on established companies like Augmont, MMTC-PAMP, or SafeGold. SEBI recently issued a warning to investors about this. SEBI stated you can buy digital gold on platforms like Paytm, Google Pay, and PhonePe. However, digital gold is not under any regulation. They are neither secure nor are they commodity derivatives. Therefore, SEBI will not be able to help if the platform defaults.
Keep The Time Period In Mind
Many people hold digital gold for the long term. But they are unaware of its storage limit and associated charges. Some platforms only permit storing gold for up to 5 years. After that period, you must either take physical delivery or sell the gold.
Delivery involves costs like tax, making charges, and transportation fees. This can decrease your overall returns. Thus, if you are investing in digital gold, decide if it is a short-term or long-term plan first. You can also choose options like Gold ETFs or Sovereign Gold Bonds. They offer both government security and interest returns.
