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Why You Should Go For Digital Gold This Dhanteras Previously ones who were expected to buy gold from their trusted jewelers are now opting to buy gold via UPI in a matter of few seconds

By Paromita Gupta

Opinions expressed by Entrepreneur contributors are their own.

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Dhanteras, an auspicious day for buying gold for before Diwali, has been an age-old practice followed by Indians in every nook and corner. On this day, one worships Goddess Lakshmi and Lord Kubera and buy gold, silver, new utensils to symbolize wealth and prosperity. While the tradition continues, one can identify that the process of investing in metal assets has been revolutionized. Previously ones who were expected to buy gold from their trusted jewelers are now opting to buy gold via UPI in a matter of few seconds.

Platforms such as Jupiter Money, MMTC-PAMP Digital Gold, Google Pay, Paytm,· PhonePe, Groww, SafeGold, Augmont Gold, and Oropocket are enabling users to purchase gold, be it in amounts small or big. Now, one doesn't need a big capital to make in investments in gold, for OroPocket users it can start from as low as INR 1 rupee.

"Digital gold is a popular way to invest in gold during the festive season. It is a convenient and secure way to buy and sell gold, and there are no additional costs, storage and insurance is there for the company to bear. These qualities are driving investors towards investing in digital gold during the festive season," shares Tarusha Mittal, CoFounder, OroPocket.

"Oropocket witnesses a staggering 25-35% jump in the volume of digital gold investing during the festive season," shares Mittal.

But why should one opt for digital gold? It is an alternate to buying gold in its physical form, where one can purchase it online, and an equivalent amount of that is kept as physical gold in an insured vault. Investing in digital gold can have several pros such as secure storage, no making charges, no minimum limit, use as collateral, and ease of exchange.

"Digital gold also eliminates the authenticity of the seller as it represents certified 24k gold of 99.99% purity and is a very affordable option even to the small retail investor as they can buy gold even in small amounts as Rs 100 and also can be sold in quick time than from the physical gold which involves various checks before the sale. It is also well secured and safe in vaults and can't be stolen like that of physical form. Moreover, schemes like SGB also offer 2.5% interest on the value of gold," shares Atul Parakh, CEO, Bigul, the digital arm of Bonanza Portfolio Ltd which just launched Mutual Funds and E-Gold services.

"In just one week, our app has experienced an unprecedented interest for our newest offering, digital gold. This trend reflects changing consumer preferences and a growing inclination towards digital solutions for both investment and gifting. Digital gold not only aligns with the spirit of festivities but also offers the advantages of accessibility and security, making it an appealing choice for both seasoned investors and those new to the concept," shares Rinku Suchanti, Co-founder, FIKAA, a platform helping woman plan their investments, including in gold.

Predominantly, buying gold has prevailed in tier 1 and tier 2 cities, but, not anymore. "Tier 3 cities, once relatively untapped in this regard, are now actively participating in digital gold investments. This shift reflects a broader socioeconomic inclusivity, as digital gold empowers a more diverse demographic, making this valuable asset accessible to a wider population. The adoption of digital gold in tier 3 cities signifies a significant change in the perception of gold as an investment, signaling financial inclusion and diversity in the gold market," adds Suchanti.

So, who are the biggest buyers in the e-gold space? For Parakh and Oropocket is it Gen Z (18-34) and Millennial. "Investing in digital gold is easier as compared to physical gold because there is no limit to investment, we can invest whatever we feel to and can purchase the same at the time we wish to. Also, is an investment which we can start and pause whenever we wish to," shares Ayushi Dawar, a 24 year old banking professional who is keen on digital gold.

During Q2FY24, gold investment increased to 210.2 metric tonnes. "The key recommendation we stress is the importance of selecting digital gold from a reputable distributor. This blend of accessibility and prudent decision-making guarantees a seamless and safe investment journey, safeguarding our customers' financial well-being," adds Harsh Choksey, Co-founder and CEO, FIKAA.

However, there are risks pertaining to digital gold which includes lack of regulatory agency, complusory GST, and upper investment limit.

How to buy gold

To simplify buying gold on such platforms, users can see the cost of gold in real time. Users who opt for digital gold have the gold equivalent to their investment be deposited in a demat account or have it stored physically in a vault or store.

One can open the desired app and search 'gold' or 'digital gold' in the search bar. Typically, the gold offered is 22k and the amount shown is per gram. The amount can be as low as INR 1 to as high as INR 1 crore.

Users can even see the weight (g) equivalent to the amount being invested. Three per cent GST is added over the amount. Once bought, the amount invested, absolute return, and delivery option can be seen in the Locker section of the app.

Paromita Gupta

Features Writer with Entrepreneur India

Covering news and trends in AI and Metaverse segments. An avid book reader running her personal blog on the side. You may reach me at paromita@entrepreneurindia.com. 
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