Introduction

Akshay Tritiya is an auspicious Hindu festival celebrated with much fanfare across India. It is believed to be the birthday of Lord Parusharama, an avatar of Lord Vishnu. Many people think it is auspicious to start something new and buy gold on this day. It's believed that buying gold on Akshay Tritiya brings luck and wealth.

However, instead of buying physical gold in jewellery, coins, and bars, you can contemplate investing in digital gold this Akshay Tritiya. Digital gold comes in various forms, including gold mutual funds and gold exchange-traded funds, among others. Read on to know why it makes sense to invest in digital gold.

Benefits of digital gold

Given below are the benefits that investment in digital gold brings to the table:

• Highly secured

This is one of the most significant benefits of digital investment in gold. Physical gold always risks being stolen or falling prey to miscreants. However, digital gold is different. You don't need to store it in your almirah or bank lockers. For example, you can acquire and store gold ETFs in your Demat account. It gives you security that's hard to find with physical gold.

Also, as you don't possess gold in physical form, you need not pay locker charges to your bank. This results in considerable savings over the long term.

• No making charges

You've likely noticed the additional making charges and GST on your bill when purchasing physical gold. These factors significantly inflate the purchase price. Furthermore, when selling, the buyer deducts the making charges, putting you at a disadvantage. However, digital gold eliminates these costs, offering a clear financial advantage.

Investing in gold ETFs or gold mutual funds is straightforward, with no transaction charges or hefty brokerage fees. This simplicity and convenience significantly reduce the cost of acquiring gold, making it a more attractive investment option.

• Pretty liquid

Liquidity matters when it comes to any investment, and gold is no different. Digital gold is highly liquid. You can easily encash it and get the money in your bank account almost instantly. For instance, gold ETFs are tradable on stock exchanges. It means you can buy or sell them like stocks.

Similarly, gold mutual funds are highly liquid. Once you place a redemption request, the money gets credited into your bank account the next day. Therefore, you can easily bank on your digital gold assets if you need cash on short notice. However, it's not so easy with physical gold where you might need to carry out paperwork and the process can be quite lengthy.

• Can be used as collateral

You can easily pledge digital gold as collateral if you need loans to fulfill any financial goal. Since digital gold has no purity issues, you can secure a good amount of money against it.

Hence, if you require any loan for any need, you can easily secure the loan by pledging digital gold to the lender. It reduces the hassle of paperwork and the chances of your loan being rejected by the lender.

• Easy exchange

This is another major benefit of digital gold. You can exchange it for physical gold and bullion anytime, anywhere. Therefore, if you ever need to exchange it for physical gold, you can easily do so hassle-free.

How to invest in digital gold?

Now that you know the benefits of investing in digital gold, let's see how to invest in them. Investing in digital gold is simple and easy. There are many ways to do so. Here are a few options at your disposal:

• Open a Demat account with a broker

To invest in digital gold, such as gold ETFs, you must open a Demat account with your broker by providing your KYC documents. Once you do so, you can easily invest in gold ETFs.

• Invest in gold mutual funds through the AMC's website

If you want to invest in digital gold through mutual funds, you can do so with the website of the fund house. If you are KYC-compliant, you can invest in gold mutual funds through systematic investment plans or lump sum directly through the AMC's website.​​​​​​​

Summing it up ​​​​​​​

As evident, investing in digital gold is a smart move compared to buying physical gold. Not only it's hassle-free but also it entails several benefits. So, go ahead, open a free Demat account with Motilal Oswal, and start investing in digital gold.