Indian investors have been investing in gold for ages. They prefer gold as a safer investment option than other investments, say, debt and equity options. India is one of the nations with the largest millennial population that is tech-savvy. It makes sense to opt for investment available digitally and high on profitability in the present digital world. One such option is Digital Gold Investment. Unlike the physical form of gold, digital gold is a hassle-free investment.
- You can buy or sell digital gold in small denominations, like 1 gm or 2 gm of gold at live market prices.
- It is a highly liquid investment to be sold during a temporary financial crisis.
- You can make a monthly investment with as low as Rs.1.
- Investing and holding digital gold makes investments convenient.
- There is no purity risk. You can buy digital gold with 999 fineness without wandering from gold store to store.
- You need not worry about security concerns. It is safe in the insured vaults, and there is no fear of theft. The financial institutions take care of the security concerns of digital gold at zero cost with some leading financial institutions.
More and more investors are moving towards such convenient and easy investment. Let us mention important factors that can help you to maximise your returns.
Get Maximum Returns From Digital Gold Investments
You can maximise your returns on digital gold investments by considering the following factors:
Gold returns are often inversely related to market returns
Gold has been growing steadily over decades and delivering more than decent returns along with the safety of capital. In the previous year itself, gold has offered 40% returns. The primary reason has been a sudden price rally due to the ongoing global pandemic. Investors need to consider that gold returns are often inversely linked to market returns. When there is uncertainty in the market, gold prices tend to rally, and it may even touch historic highs. Many portfolio managers suggest gold investments to hedge the portfolio against volatile market risks. While considering digital gold investing, you should ensure exposure to gold in your portfolio to maximise the returns.
Holding Period of the Digital Gold Online Investment
Digital gold investing is more cost-effective in the long run. Digital gold investment is treated like physical gold. Your digital gold online investments qualify for long-term capital gains (LTCG) benefits. You should hold your gold investment for three or more years to benefit from LTCG and thus, maximise the returns. Therefore, long term e-gold investors can maximise their returns.
Costs Associated with Other Form of Gold
When you invest in gold ETFs (Exchange Traded Funds), it comes with recurring costs like maintenance costs. Buying gold in the form of gold in the physical form also increases maintenance costs. If you invest in gold jewellery, the margin cut will be high at selling, thus reducing returns. On the contrary, digital gold online investment is a straightforward investment option. It has made the investment process quick and convenient and has also reduced the purchase cost.
No Hidden Costs
Electronic trading of dematerialised gold has already made the investing process cost-effective, positively impacting your gold investment returns. You should choose a financial institution offering digital gold online investment options without hidden costs to further increase the returns. Digital gold carries just 3% GST (goods and services tax), charged during purchase, which is less than physical gold. Investors may be charged another 2-3% fee against the storage facility, insurance and trustee fee. You can give a thorough look at the costs associated with e-gold investments. You can find lending NBFCs offering zero cost safe custody.
High level of gold purity for maximum ROI
Gold is always a safe bet, provided you invest in pure gold. The higher the purity, the higher the gold value. You should look at the purity of digital gold offered to you by the financial institution. You can find NBFCs offering digital gold investment with 999 fineness of gold. You can sell them back their gold at the prevailing market rates to maximise your returns.
Thus, this is how you can invest in e-gold smartly.
It is now convenient, more than ever, to buy gold and safekeep it digitally, unlike physical form. The investors can buy the gold at the right time, considering the inverse relation of the gold price with the market rates and sell the assets when the prices are high to make a substantial profit. Enjoy higher returns with a hassle-free investing experience and make most of the markets.