Physical Gold Vs Digital Gold- What is the Difference

Why Invest in Gold?

Without a doubt, it is quite prudent for an investor to wonder if the particular asset is a worthy investment or not. It is especially true when it comes to gold. Also, the fact that it is an inert metal and doesn’t earn much interest.

But, there are reasons why people still choose to invest in gold.

Gold is Money – Well, gold has been used as currency in history much more than any other currency. The role it still plays as currency makes it superior to any other previously used currencies.

It can’t go Bankrupt – Gold never goes to the value of 0. It has never happened in over 3000 years. It is the last man standing when a crisis hits.

It Acts as an Inflation Hedge – Gold prices have quadrupled in the past decade, and gold fares high when the inflation rate exceeds the interest rate.

It is a Tangible Asset – It is one of the very few tangible assets and creates a safety perception among the investors.

The benefits of investing in gold can go on, and it is also the perfect investment to diversify a trader’s portfolio.

Is Physical Gold the Only Option of investing?

Investing in physical gold has been a preferred and favored investment option in India. This yellow metal has only increased demand in the past years. Physical gold especially is bought in jewelry, gold coins, and biscuits, and most often for consumption purposes. It is bought directly from a jeweler or bank, and it does not involve an intermediary.

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Investing in physical gold has its own set of drawbacks. And investing in physical gold isn’t the only option of heading with gold investment today. Investors have options of Gold ETFs, Gold Mutual funds, Sovereign Gold Bonds, and Digital gold. Further on, we will see how Digital gold is different from Physical gold and how an investor can benefit from it.

What is Digital Gold?

Digital gold is gold that can be bought online and stored in insured vaults by the seller on behalf of the customer. All you would require for this is internet or mobile banking, and you can start investing digitally from anywhere at any time.

P.S- Digital Gold investment is one of the most efficient and reliable options for gold during the pandemic too. 

The Major Differences Between Physical Gold and Digital Gold


-Physical gold prices aren’t uniform.

-The prices of digital gold are uniform across the country


-All physical gold sellers do not provide gold with 99.5% pure gold quality.

-The purity in digital gold is always guaranteed.


-Buying physical gold involves paying 20 to 30 percent of the total gold’s value in making charges.

-Digital gold can be bought at mentioned prices with no extra charges attached except for the 3% GST.


-Physical gold has to be stored in personal lockers at the risk of the investor.

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-Digital gold is stored by the seller in a secure and insured locker.


-One can purchase physical gold from any bank or jeweler, and it can be exchanged through any jeweler.

-One can redeem digital gold as coins, bullions or easily cash out the investment.

Benefits of Investing in Digital Gold

There are quite a lot of benefits when it comes to investing in digital gold. They are:

Invest as small as you want –

An investor can invest as small as he wants when it comes to digital gold. There are no restrictions or minimum purchase limits. So, if you want to go in for a trial round, or want to invest in small, digital gold is a good way to go. 

Assured Quality –

Investors only want to possess 24 karat gold, and with digital gold, that quality is never compromised. As a result, the investors do not have to worry about the protection of purity.

Redemption – 

It can be easily and quickly redeemed. It can either be through physical gold coins or bullions. Or investors can also choose to cash out their investment without any hassles. You can also buy and sell the units effortlessly when you see price drops and hikes.

Avail Loans Against Digital Gold – 

These investments can be used as collateral for loans.

Safety –

Digital gold assets are secured and insured vaults. As a result of this, the risk of theft or loss is completely eliminated. The responsibility of securing the gold lies with the seller.

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Investment Tracking – 

Investors can effortlessly track investment through online platforms, let it be apps or websites. It can easily allow investors to assess their investment’s performance and gain better insights.

Diversification of Investor Portfolio – 

Digital gold investment is adding to your portfolio in a healthy manner, and it is also a trusted asset for hedging.

Real-time Rates –

Platforms that offer digital gold investments also offer real-time gold rates. It makes an investor take advantage of the price movements and make suitable purchases.

How to Buy Gold Online?

The process of buying digital gold:

Step 1 – Visit a platform that offers digital gold investments.

Step 2 – On the platform, choose digital gold.

Step 3 – Enter the amount in INR or grams.

Step 4 – Choose your payment method.

Step 5 – Store the gold bought in secured lockers.

Step 6 – Sell the gold when you want.

Step 7 – If you do not want to sell or trade the gold, you can always take physical delivery of it.


If the sole purpose of buying gold is for investing, one can invest through digital gold. Through digital gold, you can sell gold when you feel the prices are skyrocketing and make huge difference sums. It is a healthy way to diversify your portfolio.

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