Buying gold? Instead of jewellery, invest in paper, digital gold

Buying gold? Instead of jewellery, invest in paper, digital gold&nbsp | &nbspPhoto Credit:&nbspBCCL

New Delhi: Arguably, gold has deep cultural significance in India. Traditionally, Indians love to possess gold and have long regarded gold as an important asset and the surest store of wealth.  Besides the traditional and emotional bonding, the yellow metal’s track record in safeguarding wealth during financial uncertainties and inflation has been striking. 

However, with the spike in gold prices, the increasing cost of holding physical gold due to the risk of theft, robbery, etc, and availability of a number of easy ways to invest in paper/digital gold.

For investing in paper/gold, there are few routes that a person can take – one can invest via gold exchange-traded funds (ETFs), gold mutual funds, Sovereign Gold Bonds (SGBs), and the latest being digital gold.

Digital/paper gold also is a good option if you are gifting your close someone. In addition, it can become a part of their emergency corpus as most of these options have ample liquidity as these can be sold on exchanges anytime.


There are risks of getting impure gold while buying in physical form. However, investors in paper/digital gold don’t have to worry as it’s the duty of the issuer of the paper/digital gold to ensure purity.

Like, for example, mobile wallet providers like Paytm, PhonePe, etc. who offer digital gold. Even Google Pay has jumped into the foray. Most of these players are selling gold in collaboration with MMTC-PAMP. Some of them have collaborated with SafeGold.( (MMTC-PAMP is a joint venture between government-owned MMTC and Switzerland-based PAMP SA.

Cost of holding

Keeping physical gold at home has risks of theft, robbery, burglary, etc. So, to keep the gold and gold items safe, the owner needs to pay rent to hire a locker and pay a premium to insure the yellow metal. However, in case of investments in paper/digital gold, the risk and cost of storing gold shifts from an investor to the issuer of paper/digital gold.

Return on digital gold

Not only does it save the cost of holding, but also provides regular returns – like interest on Sovereign Gold Bond. SGBs, offered by the RBI on behalf of the government of India. Investors have to pay the issue price in cash and the bonds will be redeemed in cash on maturity. The Bonds bear interest at the rate of 2.50 per cent (fixed rate) per annum on the amount of initial investment. Interest will be credited semi-annually to the bank account of the investor and the last interest will be payable on maturity along with the principal.

Ease of Investment

Investing in online gold is a convenient option. Also, in the current COVID situation if you are hesitant to step out then this is the best option for you. Investors may hold digital gold infraction – like the option to invest as low as Re 1 in MMTC-PAMP Digital Gold (999.9 purity certified gold). Moreover, investments may be done from home through Demat accounts and even through UPI Apps on smartphones.