Digital Gold: India’s Fast-Emerging Investment Phenomenon

What Is Digital Gold & Who Offers It?

Digital gold allows users to buy fractional amounts of gold (even as little as ₹1 worth), with equivalent physical metal held in secure vaults by certified providers such as MMTC-PAMP, SafeGold (Digital Gold India), and Augmont. These platforms partner with fintech wallets like Paytm, PhonePe, and Google Pay to offer seamless purchase, redemption, collateralization, and even doorstep delivery of physical coins or bars.

Benefits of Digital Gold

• Ultra-low entry point and high liquidity: Users can buy in tiny increments and sell instantly at live market rates.

• No storage or theft concerns: Vaulted storage and insurance eliminate the need for home safes or bank lockers.

• Purity and transparency guaranteed: Certified 24K gold with verifiable transaction records.

• Collateral utility: Can be pledged for instant loans through certain apps and NBFCs.

Risks and Drawbacks

• Regulatory grey area: Unlike gold ETFs (regulated by SEBI) or Sovereign Gold Bonds (issued by RBI), digital gold currently operates outside regulatory oversight.

• GST and hidden charges: A 3 % GST is applicable, along with provider spreads (2–3 %), storage charges, and redemption/making fees.

• Investment limits: Some platforms cap holdings at around ₹2 lakh.

• Cybersecurity and solvency risks: Investor trust is tied to platform reliability, cybersecurity practices, and storage partner integrity.

Top Digital Gold Investment Apps in India

1. Paytm (in partnership with MMTC-PAMP and SafeGold)

   Features: Buy/sell instantly, gift gold, redeem in coins.

   Pros: Strong brand, integrated wallet, UPI support.

   Caution: Charges vary based on partner.

2. PhonePe (SafeGold)

   Features: Real-time gold price tracking, auto-invest feature, doorstep delivery.

   Pros: Popular for UPI and mobile utility.

   Caution: Limited investment tracking tools.

3. Google Pay (MMTC-PAMP)

   Features: Clean interface, instant transactions, secure vault-backed gold.

   Pros: Seamless UPI integration, brand trust.

   Caution: Basic functionality only.

4. Groww & Kuvera (Augmont)

   Features: Investment goal setting, SIP in gold, portfolio tracking

   Pros: Comprehensive wealth management tools.

   Caution: Limited to users with investment accounts.

5. Augmont App (Direct purchase from provider)

   Features: Buy gold/silver, get delivery, access to gold loans.

   Pros: Strong backend, direct-to-vault model.

   Caution: App UI is not as beginner-friendly.

Why Investors Are Choosing Digital Over Jewellery?

A recent survey found that 50 % of digital gold investors cited “returns” as their primary motive; 39 % valued the “no theft” assurance, while 36 % emphasized purity and 25 % highlighted convenience. As jewellery purchases slow—especially in urban households—digital gold is becoming the investment of choice for millennials and Gen Z.

Meanwhile, gold ETF inflows surged. In Q1 2025, India’s gold ETF holdings stood at over 63 tonnes—up from just 21 tonnes in 2020.

Smart Comparison at a Glance

Outlook

The World Gold Council projects continued strength in investment demand in 2025 despite weaker jewellery buying. Digital platforms, aided by fintech innovation and financial inclusion, are expected to capture a growing slice of the gold market. But with digital gold still lacking formal regulation, investor education and due diligence remain crucial.

Tips for New Investors

1. Use RBI or SEBI-regulated options for long-term holdings (SGBs, ETFs).

2. Verify the digital gold provider and storage arrangements.

3. Understand applicable charges, redemption rules, and tax implications.

4. Use digital gold primarily for short-term tactical allocation or gifting.

Conclusion
Digital gold provides a convenient, low-entry and modern route to gold investing. But investors must remain aware of its unregulated status and evaluate it against regulated options like ETFs and SGBs for balanced wealth creation.