GUIDESINVESTMENTS
Digital Gold: Meaning, Investment Options, Benefits & More!
2 MIN • 
LAST EDITED BY SABA MALAIKA ON JUNE 18, 2025.
LAST EDITED BY SABA MALAIKA ON JUNE 18, 2025.
GUIDES LAST EDITED BY SABA MALAIKA ON JUNE 18, 2025.
Gold has always persisted as one of the most reliable investment options for several Indian households. But the number one limitation pertaining to this metal was that it was impossible to buy physical gold using smaller sums until the concept of digital gold was born. So, what is digital gold ?
Think of it as gold existing in the virtual space. Digital gold is an alternative that allows you to purchase specific quantities of this precious metal online, eliminating the need to buy gold in its physical form. The gold you acquire is then stored in an insured vault maintained by the intermediary.
But is digital gold a suitable alternative to material assets like gold bars or jewellery? Stay with us to find the answer and explore the benefits of digital gold!
When you buy physical gold, you initiate direct contact with the seller to complete the sale. But during transactions related to digital gold, the number one requirement is a mediating party. This is usually a mutual fund house or another entity investing in gold and related instruments on your behalf.
So, how to buy digital gold ? Here are a few popular options:
Similar to how equity mutual funds pool their investments in shares of different companies, gold mutual funds attach themselves to paper and physical golds. Some fund houses may also pool money into companies that mine or extract gold. The only criterium is that 80% of the investments done by gold mutual funds must be in gold-focused instruments.
On behalf of the Government of India, the Regulatory Authority offers sovereign gold bonds (SGBs), where each bond represents one gram of gold. What makes SBB attractive is the additional 2.5% rate of interest accrued annually, along with the returns acquired due to the appreciation in gold’s value.
Unlike mutual funds, Gold ETFs are passive instruments that focus on delivering value by following the prices of physical gold. These are considered commodity funds, except they trade like stocks. Many investors consider ETFs similar to mutual funds. However, the primary difference is that ETFs are more similar to stocks since you require a demat account to buy and sell them.
The digital gold price varies according to the underlying instrument, i.e., the precious metal. But is it worth investing in digital gold over physical assets like jewellery?
Digital gold is always of the purest form. Every virtual gold bought and sold on stock exchanges is 24 karat, or 99.9% pure.
Physical gold assets require you to purchase a minimum quantity, compelling you to shell up a few thousand bucks to start your gold investment. However, most mutual funds, ETFs and bonds do not possess any such criterium.
Physical gold has to be stored carefully, with a special emphasis on maintenance to preserve the lustre of the metal. Amidst these processes, you can incur a host of costs.
Digital gold investments are made simpler with Fi. Employ our dedicated mutual fund investments to partake in gold mutual funds commission-free. Coupled with its intuitive user interface, Fi is perfect for novice & seasoned investors. Fi is 100% secure with robust security as it works under a SEBI-registered investment advisor, epiFi Wealth. Choose from weekly, daily or monthly SIP payments or set up automatic payments using a single tap!
Digital gold is a virtual form of gold, granting investors the flexibility to avoid purchasing physical gold while capitalising on the appreciation of gold’s value.
You can purchase digital gold through one or all of the following investments:
You can use platforms like Fi Money to invest in digital gold through gold mutual funds or directly purchase sovereign gold bonds offered by the Regulatory Authority.
Digital gold is a secure and reliable method of investing in gold without purchasing physical assets.
