Digital gold or physical gold: Which is better to buy on Dhanteras, and which one offers the most returns?

In India, gold is not just a jewelry item, but also a popular investment. Traditionally, people buy gold jewelry, coins, and bars during festivals like Dhanteras and Diwali. However, in recent years, the trend of buying digital gold, or online gold, has also grown rapidly. Let's explore which of these two options might be best for you amid rising prices.

Physical Gold
Physical gold, i.e., jewelry, coins, or gold bars, has its own appeal. You can wear it, gift it, and even profit when its value rises. However, as an investment, it also involves additional costs such as making charges, GST, and locker charges. There's also the risk of theft. All these factors can impact your returns.

Digital Gold
The biggest advantage of digital gold is that it can be purchased for as little as ₹10. There are no making charges. It is stored in secure vaults, and you will have a digital proof (custody receipt). You can sell it online 24/7. Therefore, if you want to invest with a small amount and need instant liquidity, digital gold may be the best option.

Overall Cost Comparison: Which is Economical?
Digital gold isn't completely free; it incurs a 3% GST and sometimes an annual charge of 0.30-4%. However, these charges are transparent and predictable. On the other hand, physical gold tends to be more expensive due to making charges, GST, and locker fees. Therefore, digital gold may prove easier and cheaper for smaller investors.

Which is better for investing large sums?
If you're looking to invest ₹2-3 lakh or more in gold, physical gold bars or coins may be more economical, provided they're from a reliable source. However, if you're looking to invest regularly between ₹100 and ₹10,000, digital gold offers convenience and liquidity.

Speaking of liquidity,
the biggest plus point of digital gold is its instant bond-correction capability. You can sell instantly through the platform on an app or website and receive the money in your bank account. However, selling physical gold may involve issues like purity testing, price discounts, buyback times, etc. Therefore, digital gold has an edge in terms of liquidity.

Security and Trust: Who is Safer?
Digital gold is stored safely in vaults and undergoes independent audits. Investors don't have to worry about theft or locker keys. However, the responsibility for security depends on the platform and its reliability. Physical gold, on the other hand, is subject to the risk of theft, loss, or maintenance because it is in your possession.

Disclaimer: This content has been sourced and edited from TV9. While we have made modifications for clarity and presentation, the original content belongs to its respective authors and website. We do not claim ownership of the content.