Digital Gold vs Physical Gold – Which Is Better? (Complete Guide for Indian Investors)

Gold has always been a favourite investment for Indians. Whether it’s jewellery, coins, bars, or now digital gold, almost every household buys gold for safety, tradition, and long-term wealth.

But with rising gold prices and new online investment options, many people are confused:

“Digital Gold vs Physical Gold — which should I buy?”

This guide explains both options in simple English, so you can choose the best one for your needs.

What Is Physical Gold?

Physical gold means gold you can touch and own.
Examples:

• Jewellery
• Gold coins
• Gold bars
• Gold biscuits
• Gold ornaments used for gifting or wearing

When you buy physical gold, you get full possession and can store it at home or in a bank locker.

What Is Digital Gold?

Digital Gold is gold bought online, stored safely on your behalf by the platform.
You can buy even ₹10 worth of digital gold.

Popular platforms:

• PhonePe
• Google Pay
• Paytm
• Amazon
• Groww / Zerodha (through partners)

Behind every digital gold purchase, real physical gold is stored in a vault by trusted companies like MMTC-PAMP, Augmont, Safegold.

Key Differences: Digital Gold vs Physical Gold

Benefits of Digital Gold

✅ 1. Buy Gold Starting from ₹10

Perfect for beginners and small investors.

✅ 2. 24K Pure Gold (99.9% Certified)

No need to check purity; it’s verified by MMTC-PAMP/Augmont.

✅ 3. Safe Storage

Gold is stored in insured, bank-level vaults.

✅ 4. Easy to Buy/Sell Online

Just a few clicks on PhonePe, Paytm, or Google Pay.

✅ 5. No Making Charges

Unlike jewellery, you save 8–25% making charges.

✅ 6. Transparent Pricing

Rates match live gold market prices.

✅ 7. Can Convert to Physical Gold

You can order home delivery of gold coins/bars.

Drawbacks of Digital Gold

❌ 1. Not RBI-Regulated Yet

Digital gold is not regulated like mutual funds or bank deposits.

❌ 2. Holding Limit (5 Years on Some Platforms)

After 5 years you may need to redeem or move to a vault company.

❌ 3. Small Platform Charges

There may be small buy/sell charges.

❌ 4. Cannot Be Used as Jewellery Directly

Physical conversion costs extra.

Benefits of Physical Gold

✅ 1. Tangible Asset

Hands-on ownership gives emotional satisfaction.

✅ 2. Can Be Used as Jewellery

Good for weddings, festivals, and gifting.

✅ 3. Universally Accepted

You can sell or exchange at any jewellery shop.

✅ 4. No Digital Risk

No platform or technical dependency.

Drawbacks of Physical Gold

❌ 1. Storage Problems

Risk of theft if stored at home. Bank lockers cost money.

❌ 2. High Making Charges

Jewellery making charges = 8–25% extra.
These charges are non-recoverable.

❌ 3. Purity Issues

You must check hallmarking. Many jewellers sell lower purity unknowingly.

❌ 4. Selling Price Is Lower Than Buying Price

You lose money due to wastage + making charges + GST.

❌ 5. Not Easy to Sell Quickly

You need to visit jewellers physically.

Digital Gold vs Physical Gold: Which Is Better for What Purpose?

Costs Comparison: Digital Gold vs Physical Gold

Is Digital Gold Safe?

Yes. Digital gold sold by:

• MMTC-PAMP
• Safegold
• Augmont

is 100% backed by real gold and stored securely.

However, it is not yet regulated by RBI or SEBI. This is the only concern.

How to Buy Digital Gold in India (Step-by-Step)

Step 1: Choose a Platform

You can buy digital gold on:

• Paytm
• PhonePe
• Amazon
• Google Pay
• Groww
• Zerodha (via partners)

Step 2: Enter Amount

You can start with as little as ₹10–₹100.

Step 3: Complete Payment

Use UPI, debit card, or net banking

Step 4: Gold Is Stored in Your Name

The platform stores your gold in secure vaults.

Step 5: Sell Anytime

You can sell online instantly and get money in your bank account.

Step 6: Convert to Gold Coins/Bars (Optional)

You can order home delivery of physical gold.

How to Buy Physical Gold in India (Step-by-Step)

Step 1: Choose a Trusted Jeweller

Prefer BIS-certified shops like:

• Tanishq
• PC Jeweller
• Kalyan Jewellers
• Malabar Gold

Step 2: Check Purity

Look for BIS Hallmark:

• 22K hallmark for jewellery
• 24K (999) for bars/coins

Step 3: Check Making Charges

Compare making charges before buying.

Step 4: Check Buyback Policy

Good jewellers offer fair buyback value.

Step 5: Safely Store Your Gold

Use lockers for long-term safety.

Digital Gold vs Physical Gold – Which Gives Better Returns?

Both have the same price movement because both follow market gold rates.

But physical gold has extra charges, which reduce your returns.

Example:

For investment, digital gold gives better returns.

Frequently Asked Questions (FAQs)

1. Is digital gold safe for beginners?

Yes. It is easy, safe, and requires no knowledge.

2. Can I convert digital gold into physical gold?

Yes, you can order coins/bars.

3. Is digital gold cheaper than physical gold?

Yes, because there are no making charges.

4. Can I start with ₹100?

Yes, digital gold allows very small amounts.

5. Which is better for weddings?

Physical gold.

6. Which is better for investment?

Digital gold is better due to lower charges.

7. Is digital gold regulated?

Not yet. But it is backed by reputed companies.

8. Can I sell digital gold instantly?

Yes, within seconds.

9. Will digital gold replace jewellery?

No. Jewellery has emotional and cultural value.

Conclusion: Digital Gold vs Physical Gold – What Should You Choose?

The answer depends on your purpose:

Choose Digital Gold If You Want:

• Easy online buying
• High purity
• Safe storage
• No making charges
• Small monthly investments
• Quick selling

Choose Physical Gold If You Want:

• Jewellery for weddings/festivals
• Tangible asset
• Emotional value

For investment, digital gold is better.
For using/wearing, physical gold is better.

Both have their own importance in Indian families.