What is digital gold and what are pros and cons of investing in it?

 Can you buy gold for one rupee? At least not at your conventional jewelry store. But you can buy digital gold online for as little as one rupee. But what exactly is digital gold? Here's an explainer

Digital gold is a virtual method of buying and investing in yellow metal without having to physically hold the gold. You can buy it online. And, the minimum buys or sell value is one rupee.

Why is this important?

Buying physical gold has certain downsides. Firstly, there is the issue of identifying its purity and legitimacy. And, secondly, there are challenges associated with safekeeping and storage.

On the other hand, digital gold is bought online and is stored in insured vaults by the seller on behalf of the buyer.

And what about the purity of the gold in question?

The metal purchased is 24k gold, or 99.5 per cent pure. Also, the buyer can be assured of its purity as it is certified by government-licensed agencies.
There are other benefits of investing in digital gold.

For one, the investor can take physical delivery of the gold at his or her doorstep.

It is also highly liquid. One can easily buy or sell units anytime and anywhere.

The digital gold you've bought can be used as collateral for online loans.

Not only is your purchase stored safely, but it is also 100 per cent insured.

Last but not least, you can exchange it for physical gold in the form of jewelry, coins, and bullion.