The habit of collecting gold digitally as paper gold is increasing among the people of India. At this point, some leading economists describe the disadvantages of digital gold.
Let’s take a look at 5 factors why you shouldn’t invest in digital gold during periods like Karva Saud, Thandares and Diwali.
1) No defense
Digital gold investments in India are still not formalized. And not safe either. In this regard, SEBI (Stock Exchange Regulatory Board) has warned investors several times.
2) Money increases when converted into gold
Some jewelers allow customers to convert their digital gold into real jewelry when needed.
However, prices are not applicable for digital gold grams-to-off-line grams. Digital gold prices are always lower than jewelry prices.
Also, at the time of transfer, customers have to pay additional costs in terms of tax and making charges.
3) You cannot verify that gold is actually kept in a vault
You cannot verify that every gram of digital gold sold online is kept in a secure vault.
4) No interest on your investment
Some digital gold sellers allow customers to buy digital gold by depositing a very small amount for a specified period of time.
However, customers do not earn any interest on such deposits. The profit expected by digital gold buyers is only possible if the price of gold rises in the market.
5) Storage facility is not free
Sellers claim that the gold equivalent of digital gold purchased by customers is stored in highly secure premises within insured and certified vaults. However, this storage facility is not always free.
Generally, free storage is provided for five years. After that, the fee will be charged on a monthly basis for the next 5 years.
What can be done?
Customers interested in investing digitally in gold can opt for Government of India Sovereign Gold Bonds (SGBs) as the best option.
These come directly under the Reserve Bank of India. They provide annual interest in addition to the gains from the rise in gold prices.
Need attention..
Companies selling digital gold usually try their best to convince you that these are assets.
In this situation, many online and offline companies are showing attractive advertisements to attract you to invest in digital gold before Karva Saud, Dhanteras and Diwali. So attention is needed in this matter.
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