Gold ETfs Vs Digital GoldNippon India ETF Gold BeES
GOLDBEES is trading near the important resistance level of 102.
Current price level is above all the key EMAs like 9 EMA(Orange Line), 21 EMA (Black Line) and 50 EMA (Blue Line).
There is an increased interest among investors toward Gold products like ETFs and Digital Gold.
However, there is a lot of misconception surrounding the difference between the two products.
Digital gold allows you to buy and sell physical gold online through digital platforms, while a Gold Exchange Traded Fund (ETF) is a financial instrument traded on the stock exchange that represents ownership in gold.
Digital Gold
Mode of Investment: Purchased through mobile apps, payment platforms, or online platforms.
Ownership: You own physical gold, which is stored in an insured, secure vault by the platform provider.
Accessibility: Can be bought and sold 24/7, with no need for a Demat account.
Minimum Investment: Possible with very small amounts, sometimes as low as ₹1.
Costs: Involves a 3% Goods and Services Tax (GST) on the purchase and potential fees for storage or physical delivery.
Regulation: Not regulated by the Securities and Exchange Board of India (SEBI), which introduces some counterparty risk.
Liquidity: Highly liquid; can be sold instantly online for cash or converted to physical gold products like coins or jewelry.
Gold ETFs
Mode of Investment: Traded on stock exchanges like regular shares.
Ownership: You own units of a fund that represents gold, not the physical gold directly.
Accessibility: Requires a Demat and trading account and can only be bought and sold during market hours.
Minimum Investment: Requires a minimum investment equal to at least one unit, which typically represents a fraction of a gram of gold.
Costs: Involves an annual expense ratio, brokerage fees, and Demat account charges but no GST on the purchase.
Regulation: Regulated by SEBI, offering higher transparency and investor protection.
Liquidity: Highly liquid, as they are traded on a stock exchange.
How to Choose Between Digital Gold and Gold ETFs
Your choice depends on your investment goals and habits.
Choose digital gold if: You want to start with a small investment, prefer the simplicity of buying through an app, do not have a Demat account, or want the option to convert your holdings into physical gold.
Choose gold ETFs if: You are a market-savvy investor comfortable with stock trading, want a more regulated and tax-efficient option for long-term investments, and already have a Demat account.
Verdict:
Digital Gold is not regulated by SEBI unlike GoldETF.
Digital Gold bears GST plus Storage Charges which may come around 5 – 6% (approx).
