How to buy gold online?
Indians love for gold is no secret. We buy the yellow metal for consumption and for investment. For investing in gold online , there are a few routes you can take – you can invest via gold exchange-traded funds (ETFs), gold mutual funds, physical gold like coins and bars, and now digital gold. To cash in on our thirst for gold, mobile wallet providers like Paytm, Mobikwik, and PhonePe have started offering digital gold.
So, if you want to invest in digital gold here are a few things you should know.
What is on offer?
Before we get into finer details of each option, here a few common points to keep in mind.
Who is offering it: You can buy gold online via mobile wallets such as Paytm, Mobikwik, and PhonePe and under the Gold Rush Plan of Stock Holding Corporation of India. All these gold buying options are offered either in association with MMTC-PAMP or Safe Gold or both. (MMTC-PAMP is a joint venture between government-owned MMTC and Switzerland-based PAMP SA.
Safe Gold is a digital platform that has tied up with various mobile wallet apps allowing customers to buy, sell and receive vaulted gold from as low as Re 1.) Purity: Both, MMTC-PAMP and SafeGold, offer gold of 24KT. However, in terms of fineness, MMTC-PAMP offers gold of 99.9 percent purity whereas SafeGold offers 99.5 percent purity.
Fineness is defined as the weight of precious metal such as gold in proportion to the total weight (inclusive of alloy and impurities). It is expressed in units of parts per 1000. According to the World Gold Council’s website, even ‘pure’ gold can contain minute amounts of impurities that the manufacturer can’t remove.
Safety: The gold purchased by you from these platforms is kept in a vault which is fully secured for all the eventualities.
How long you can hold on to the gold: If gold is bought from the MMTC-PAMP platform, then there are no storage charges. One can keep the gold for maximum for five years. However, after five years, you are required to either convert it into gold coins or sell it. To avoid making your account inactive, you are required to do one transaction in at least every six months.
Similarly, if you are buying gold from SafeGold using PhonePe or Mobikwik, then there are storing charges. For gold bought on
PhonePe through SafeGold platform, if the amount of gold is more than two grams in the first two years, then there are no charges. If it is less than two grams, then a charge of 0.05 percent per month is charged.
On the other hand, gold bought from Mobikwik can be stored for a maximum of seven years. There are standard processing charges plus GST. However, Mobikwik did not share how much those charges are.
Features of Gold on PhonePe
a) Buying of gold starts from Re1 or 0.001 grams. However, to sell it, one must have minimum gold worth of Rs 5. You cannot buy and sale on the same day.
b) The gold rate quoted on the app includes customs duties and taxes. There is a differential quoted by MMTC-PAMP and Safe Gold due to a difference in gold in terms of fineness.
c) The live rate of buying and selling is valid for 5 minutes.
d) One can purchase maximum up to Rs 49,999 of gold in a single day. The maximum you can accumulate is 60 grams.
e) One can buy gold from both the platforms. Each locker will be separately maintained by them.
f) Conversion of gold into coins/pendants starts from 1 gram. You will be required to pay delivery and making charges, as applicable.
g) The gold coin or a pendant would be delivered in tamper proof packaging.
Features of Paytm’s Digital Gold
a) Minimum value to buy gold starts from Re 1 to a maximum of Rs 1.5 lakh. In grams, you can buy a minimum of 0.0005 grams and a maximum of 50 grams.
b) Selling of gold starts from 0.0004 grams or Rs 5. The live price is valid for 6 minutes to complete the transaction.
c) Additional charges will be levied for custody after five years. However, Paytm did not respond to how much those charges are.
d) At the time of sale, you will be required to provide your bank account and IFSC code details. The money will be credited into your account within 72 hours.
e) According to the FAQs section, on any given day, the selling price is lower than buying price because there are certain costs which include taxes, bank charges, and others.
f) You can also send gold as a gift to your loved ones.
g) Conversion of gold into coins starts from 1 gram. Additional delivery and making charges will be applicable.
Features of Gold on Mobikwik
a) On the app, you can track gold price for the last 7 weeks.
b) You can buy gold from minimum Re 1 to a maximum of 30 grams of gold. A non-KYC compliant user can store a maximum of 15 grams
c) You cannot sell gold within 24 hours of buying it.
d) Live price is valid for 5 minutes.
e) Post sale of gold, money is transferred into your bank account via UPI or e-wallet on a real-time basis.
f) Selling price is lower than buying price because buying price includes GST and processing charges. However, these processing charges were not shared by Mobikwik.
g) Sale of gold starts from Re 1.
GoldRush from Stock Holding Corporation
a) Buying of gold starts from Rs 1,000. Maximum limit of purchase in a single transaction is Rs 49,999.
b) To buy gold from Stock Holding, you will be required to open a ‘metal’ account and complete the KYC process. No registration fees.
c) Settlement of the account will be done via physical delivery of gold. The physical delivery of gold starts from 1 gram in the form of gold coins or bars. To convert fractional units into the next full gram, you can pay additional money and other charges, if any.
d) The gold purchased on your behalf will be kept in a fully secured vault and gold will be credited into your metal account the next day once the payment is received.
e) Withdrawal of gold starts from 1 gram of gold. Making and delivery charges will be additional.
f) There is no limit on the quantity of gold you can accumulate.
g) You are mandatory required to make at least one physical withdrawal during a consecutive six month period. You can keep the gold for a maximum of five years
h) Fractional sale of gold holding can be done only at the time of closing the account.
What you should do
Digital gold is a convenient way to invest in gold. However, while deciding on which provider to opt for, you should compare the various features and charges on the product. Further, as the features of different gold and gold-based investment options available in the market vary quite a bit, buyers need to evaluate these vis-à-vis their needs and financial goals before investing.