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8 Answers to the Most Frequently Asked Questions About Digital Gold

April 21, 2023

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    Want to buy Digital Gold? Have questions and doubts about it? Read on as Jar answers the most common FAQs about Digital Gold.

    "Is it possible to buy gold for ₹1? Not typically in a jewelry store. However, you can now purchase gold in digital form for as little as ₹1 online. Interesting, isn't it? Have more questions about digital gold? See below for more information."

    In recent years, the digital revolution has spread to the Gold market, introducing this new type of investment – Digital Gold.

    In India, Digital Gold is a relatively new concept. Hence, there are loads of questions and doubts floating in the air. 

    We at Jar are here to answer 8 most frequently asked questions by you about Digital Gold:

    1. What is Digital Gold? 

    Digital Gold is the modern way of buying Gold through online channels without physically holding Gold.

    So if you're looking to purchase Gold, it is a more convenient, safe and cost-effective option.

    For every gram of Gold you buy, there is actual 24k Gold stored in a locker in your name by one of the three Gold banks in India - Augmont,  MMTC - PAMP and SafeGold.

    With a single click of a button on the app, you may purchase, sell, or request physical Gold to be delivered to their home.

    The best part is that there is also no minimum purchase requirement for Digital Gold. You can begin with as little as ₹1 and work your way up.

    What is Digital Gold?

    2. Where to buy Digital Gold?

    One can buy Digital Gold from any registered apps and intermediaries. Like - PayTM, PhonePe, Google Pay, etc. It can also be bought from Jar App for as low as ₹1.

    Jar app, which is backed by NPCI and the leading UPI service providers in the market, automatically invests your money in Digital Gold, encouraging you to save every day. Discover how to make advantage of the Jar App.

    Without KYC, Digital Gold can be purchased, but only up to a specific quantity, depending on the platform.

    Some popular apps allow you to buy Gold worth up to ₹50,000 without having to go through a KYC process, like Jar.

    3. What are the advantages and disadvantages of Digital Gold?

    Advantages of investing in Digital Gold

    • Digital Gold is simple to keep track of and is accessible at any time.
    • It has a high level of liquidity and is available for purchase 24 hours a day, 7 days a week, 365 days a year, including holidays.
    • Gold is seen as an inflation hedge and can be used as collateral for loans.
    • For the past 92 years, Gold prices have been rising YoY. Gold has intrinsic worth and has been a fantastic asset with even better returns in India, aside from its cultural significance.

    Disadvantages of investing in Digital Gold

    • It does not provide you with any passive income, i.e., you do not earn interest on your investment.
    • Another source of concern is the fact that Digital Gold is not subject to SBI or SEBI laws.
    • On many partner sites, the maximum amount of Gold that may be invested is Rs. 2 lakh, which may be a hurdle for some investors.
    • Holding businesses charge a tiny management fee for holding your Digital Gold while it is being delivered.

    4. How to buy Digital Gold? 

    Digital Gold is a better option when compared to a lot of other investments due to its ease of purchase and convenience.

    It is just like ordering a pizza or some top. All you need to do is:

    • Go to any Gold-investment platform, such as Jar, Paytm, Kalyan Jewellers, PhonePe, Google Pay, and so on.
    • Select the ‘Gold locker/vault’ option.
    • Enter the amount you would like to invest in Digital Gold. The price of Digital Gold is dependent on market fluctuations, so one can buy it at a fixed rate provided by the intermediary or buy Digital Gold by weight.
    • Make payment using a debit or credit card, net banking, or simply from your wallet.
    • Following that, the amount of Gold credited will be instantaneously updated, and your Digital Gold will be held in a vault that is 100% insured.
    • Instantly sell or purchase Digital Gold. Investors can receive their Digital Gold in the form of bullions or coins, depending on their preference. Many Digital Gold intermediaries have a delivery limit and charge a fee for exceeding it.

    5. Why should I invest in Digital Gold?

    There are plenty of reasons why Digital Gold is a great option to invest in.

    • Investment Size: Investing in Digital Gold is quite affordable, and you can buy and sell it for as little as ₹1.
    • Storage and Safety: Digital Gold has no storage or security issues. Every gram of Gold in your account is backed by genuine physical Gold held in a safe vault by the seller in your name. This ensures that you are never in danger.
    • High Liquidity : Gold is the most liquid commodity. Digital Gold can be bought and sold anywhere and anytime. You don't need to visit a dealer or keep a secure Gold purchase account for many years to get the full resale value of the Gold in the future. 
    • Trading: Digital Gold may be bought and sold online in a few simple steps at any time and from anywhere. Money is deposited straight into your bank account or registered wallet.
    • Pure Gold with No Hidden Fees: Digital Gold only allows you to deal in pure Gold, i.e. 24 carat Gold. Only Gold is used to invest the complete amount you spend. When you make a purchase, you simply have to pay 3% GST.
    • Security: For every gram of Gold you purchase, genuine 24k Gold is held in a locker in your name by one of India's three Gold banks: Augmont, MMTC PAMP and SafeGold. This ensures that you are never at risk.

    6. What if I lose your smartphone, will my Gold disappear?

    Nope! Digital Gold is also registered in your name, just like stocks on the stock exchange.

    It's kept safe in vaults that are insured and monitored by a third-party trustee.

    This ensures that your Gold is safe, even if the app from which you purchased is no longer available or you lose your smartphone.

    7. Who should buy Digital Gold?

    Digital Gold is an option for anyone who cannot afford to buy physical gold or invest large quantities of money in the yellow metal at one time.

    Digital gold has a purity of 99.9% and can be purchased for as little as 1 using the Jar App, which eliminates the need to store it safely.

    You only need your phone and the Jar App to get started. Jar also allows you to set up auto-investing.

    8. How much tax do I have to pay on the sale of Digital Gold?

    Any earnings from the sale of your Gold assets (which could include gold jewellery, digital gold, or coins) within three years of the date of purchase will be deemed Short-Term Capital Gains (STCG).

    It will essentially be added to your annual income, and you will be required to pay tax on the highest income tax bracket in which your income falls.

    The earnings from the sale of your jewellery, gold coins, or digital gold after three years or longer from the date of purchase, on the other hand, will be categorised as Long-Term Capital Gains (LTCG).

    Long-term capital gains on the sale of gold assets are taxed at 20%, plus a surcharge and an education cess, if applicable.

    It's a terrific alternative for people who wish to save Gold for future use because it's easy to sell and purchase at any time of day, and also easy to deliver.

    There are a number of simple ways to purchase Digital Gold, one of which is the Jar App, which allows you to invest in the yellow metal automatically.

    Jar can assist you in meeting your financial objectives by allowing you to save money on a daily basis from your transactions.

    You can set up the auto pay feature or invest manually, right from ₹1. It only takes 45 seconds to set up the app.

    Jar app automatically invests your spare change in Digital Gold, allowing you to build up a Digital Gold portfolio for the future.

    Start your Daily Savings with Jar App now and let it grow with Digital Gold Investment.