Gold has long been considered an appealing investment option due to its intrinsic value and hedge against inflation; however, its price fluctuations make it potentially risky.
Digital gold investments provide all of the same benefits of physical gold without risking theft, robbery, locker fees or transaction charges.
1. Investing in SGBs
SGBs offer several advantages over physical gold, including higher liquidity and potential returns. Furthermore, SGBs are backed by the government, providing investors with greater peace of mind than many other investment options.
Prior to investing, it’s essential that you understand the risks associated with SGBs. Your investment horizon and tax treatment of SGBs could impact their return potential and can change over time.
SGBs offer an effective way to diversify your portfolio and hedge against market risk, with lower costs than physical gold and offering fixed interest rates at attractive returns. You can invest as little as one gram, making SGBs accessible for investors with smaller portfolios. Plus, SGBs are easily tradeable on secondary markets!
Digital gold investments have become more accessible, allowing investors to purchase or sell assets with just a few clicks from their smartphones or computers. This form of investing appeals particularly to millennials and Gen-Z investors who seek efficiency over face-to-face interactions.
Digitized gold investments offer many advantages over physical and ETF investments, including 24×7 access, transparency, pure gold backing and liquidity advantages.
Spare8 is a digital gold platform with one of the fastest onboarding processes and an easy KYC process, enabling investors to begin investing with minimal paperwork required. Furthermore, Spare8 eliminates locker rental costs altogether – something especially attractive to investors who may need to move between cities during their work tenures. Furthermore, after eight years investors can cash out without incurring capital gains taxes.
Gold investments are an attractive choice for young millennials due to its low ticket size and ease of investing.
One of the major drawbacks associated with gold investment is taxation. Selling physical gold attracts 20% taxes and 4% cess; digital gold sold after certain time frames may also incur these charges.
Hold digital gold for more than three years and it becomes considered long-term capital gain and taxed at flat rates with indexation benefit compared to selling physical gold – thus significantly reducing tax liabilities compared with selling physical gold and making SGBs an excellent way for individuals looking to diversify their portfolios.
Digital gold can be traded at real-time prices at any time of day, offering transparency and market assurance. Furthermore, its convenient conversion into physical gold removes storage hassles and insurance concerns.
Additionally, investors can invest as little as Rs 1 in digital gold and access their investments 24*7*365 – making this an attractive solution for people who prioritize liquidity over other considerations.
Digital gold offers many benefits to investors, yet presents unique challenges in emerging markets. These challenges include technical literacy and infrastructure requirements; regulation clarity and support from stakeholders; security concerns related to cyber fraud risks on digital gold platforms can also arise; these risks can be reduced by making sure providers adhere to relevant regulations.
Digital gold investments eliminate concerns over theft of physical gold, yet it is crucial that you research the security features of any platform you choose as well as any hidden charges associated with purchasing or selling this investment asset.
At the core, whether or not digital gold investment is right for you will depend on your financial goals and risk tolerance. Make sure to carefully examine each option available, consult with qualified financial professionals as you do so, and use this advice as you make a sound decision that meets both your investing goals and lifestyle requirements – good luck!