Things Senior Citizens Should Consider Before Buying Digital Gold

With a plethora of product options for gold consumers, should senior citizens consider buying digital gold, and what are the things they should keep in mind?

Versha Jain
November 7, 2023
Digital Gold - Things Senior Citizens Should Consider Before Buying?

Digital Gold - Things Senior Citizens Should Consider Before Buying?

Gold demand increases during the festive season every year. On auspicious occasions like Dhanteras, Diwali, and weddings, the demand for the yellow metal soars. Besides its use as a gift item, Indians buy gold to create wealth from its price gains over time. Hence, many people, including senior citizens, continue to invest in gold because of its high liquidity and value retention ability, which can immensely help post-retirement.


However, the safe storage of gold can be a challenge. Recently, a senior citizen was reportedly robbed of 360 grams of gold jewellery worth around Rs 20 lakh from her house in Kolkata by a caretaker, highlighting the high risk of theft involved with physical gold. Given these disadvantages of physical gold, some people have started investing in digital gold.

So here are a few things senior citizens should consider before buying gold.

Ease of Buying and Selling: Unlike physical gold, you can buy and sell digital gold 24/7 with an internet connection. So, the process is fast and convenient.

No Storage Hassle: There is no storage hassle or safety issue with digital gold. The seller keeps the gold in the vaults on the buyer’s behalf.

Small Investment Sum: One can invest in digital gold for as little as Re 1. Thus, small investors can consider investing in gold.

GST And Other Charges: A 3 per cent Goods and Service Tax (GST) is levied on digital gold sales. Sachin Kothari, director of Augmont, says, “There is a 3 per cent GST charge when purchasing digital gold. This implies that a person will receive gold valued at Rs. 970 if they pay Rs. 1,000 for digital gold. Delivery and making charges need to be paid when selling digital gold, only when they order the gold to be delivered to their address”. While GST remains the same for buyers, other charges may differ, such as storage, insurance, and management fees.

Loans: Digital gold is liquid and can be sold anytime, but loans against these assets may not be widely available. Kothari explains, “Compared to physical gold, investments in digital gold have higher liquidity since they are quickly convertible into cash. A few digital gold loan providers provide gold loans against digital gold kept in their vaults”.

Tech Challenge: No matter how easy it is to buy digital gold through mobile apps, senior citizens, in general, find it difficult and suspicious. So, considering this gold investment option, they should have someone to help them.

Storage Period: While buying digital gold, investors get a confirmation regarding the purchase and storage in the seller’s vault on their behalf. But one should confirm from the seller for what period the free storage is available. As per Kothari, “Digital gold can only be stored in vaults for 5 to 10 years. The storage of digital gold is free for the first five years. Then, providers charge a storage fee, which is very minimal, less than 0.5 per cent per annum”.

No Regulatory Body: Digital gold does not come in the purview of any regulatory body, like other gold investments; for example, SGBs are administered by the Reserve Bank of India (RBI), gold exchange-traded funds and gold mutual funds are regulated by Securities and exchange board of India (Sebi).

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