Reasons to Invest in Digital Gold & The Risks Involved

byMrinal MandalLast Updated: August 24, 2022
Reasons and risks in digital gold investment

Are you planning to invest in digital gold but are uncertain about the benefits and the risks involved? In that case, you have come to the right place as we are going to walk you through why you should invest in digital gold and what are the risks are involved in it. 

There are many reasons why digital gold gives you an upper hand over buying or traditionally investing in gold. One of those advantages is the ease of buying and selling, and how quickly you can do that both with the digital gold. Let’s check the top 5 reasons to invest in digital gold in the section below.

5 Reasons You Should Invest in Digital Gold 

The following points serve as reasons that you should consider investing in digital gold

  1. Secure investment: When you buy gold digitally, the gold of equal worth is stored physically in a vault or a safe by the merchants in the highly secured premises. Therefore, it is a very secure investment and you don’t have to worry about the safety of the gold you buy digitally.
  1. Buy or sell gold anytime: Digital gold provides you with immense ease and flexibility for both, buying and selling the gold. You can buy or sell any amount of gold whenever you want, at any time of the day. You will not have to pay any additional fee for buying or selling the gold digitally.
  1. You can invest a small amount: Digital gold takes away the problem of buying a certain amount of gold. You can buy any amount of gold you want, no matter how small. For example, you can even buy gold of INR 10 or INR 100 and enjoy the benefits of investing in digital gold. 
  1. Access to real-time market prices: Initially, when you had to go to a jeweller to buy or sell the gold, you didn’t have the access to the real-time market prices. For example, suppose you buy gold from a jeweller, and after some time, you decide to go back to the same jeweller to sell the same amount of gold. In such a situation, the seller will buy it from you at a lower price than the price he sold the gold at. However, this is not the case with digital gold, as you have access to the real-time gold prices and you can buy or sell the gold on the market prices itself without having to pay any commission or an extra fee.
  1. Get 24K pure gold delivered to your doorstep: As we mentioned, when you purchase digital gold, it means the gold of equal worth is stored in your name in a vault or a case. You can get that 24k gold delivered to your doorstep whenever you want. 

Risks Involved in Digital Gold

It is impossible for anything to only have advantages and have no disadvantages at all. Now, as we have already talked about the top 5 reasons to invest in digital gold, let’s talk about the risks involved with digital gold.

  • Absence of a regulator: Now, as it is very flexible to buy or sell gold with the digital gold service, one of the drawbacks it comes with is that there are no regulators. When you buy digital gold, the producer purchases the gold of equal amounts in your name and keeps it safe in the vaults. Generally, there is a trustee appointed to maintain and check the quantity and purity of gold. However, there are no regulators in the whole process to monitor the process. 
  • You can’t skip the GST: As there are no additional charges or fees for buying, storing or selling the gold digitally, you can’t still skip the GST. There is a 3% GST charge on buying digital gold. This means you will get gold worth INR 970 when you purchase gold worth INR 1000. 
  • Limit on investment period: You can’t store your gold forever when you buy digital gold. This means that the producers can hold the gold for you for a limited time and after that period they have to either deliver it to your address or sell it and send the money obtained from the sale to your account. 
  • Delivery & making charges: When you order the gold to be delivered to your address, it will be delivered to you in the form of coins or bars. This means that the producers will have to make the ordered amount of gold in the form of coins or bars. Therefore, there can be delivery charges as well as making charges on you when you order the gold to be delivered to your address.
Read More: How to Buy, Sell or Invest in Digital Gold


Digital gold surely has revolutionised the means of investing in gold and more and more people are switching to digital gold. There are many benefits that digital gold offers over traditional means but it also comes with a few drawbacks of its own.

Ques: Is it safe to invest in digital gold?
Ans: Yes, it is safe to invest in digital gold. Your purchased gold is kept safe in vaults or safes of highly secured premises.
Ques: Where can I invest in digital gold?
Ans: You can buy digital gold on the Paytm app or Paytm’s website. Follow these steps to buy digital gold:
  • Open the Paytm app on your mobile phone
  • Tap on the All Services section
  • Choose from the options: Buy in Amount or Buy in Grams
  • Enter your amount and click on Proceed
  • Complete your purchase to buy your digital gold
Ques: Are there taxes on digital gold?
Ans: Yes, there are good and service taxes (GST) on the purchase of digital gold. You will be charged 3% of GST on the purchase you make of digital gold.

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