How to buy gold online?

Here we have compared the features and what’s on offer by Paytm, PhonePe and Stock Holding Corporation of India. So, if you want to invest in digital gold here are a few things you should know.

What is on offer?

Before we get into finer details of each option, here a few common points to keep in mind.

Who is offering it: You can buy gold online via mobile wallets such as Paytm PhonePe and under the Gold Rush Plan of Stock Holding Corporation of India. All these gold buying options are offered either in association with MMTC-PAMP or SafeGold or both. (MMTC-PAMP is a joint venture between government-owned MMTC and Switzerland-based PAMP SA. SafeGold is a digital platform that has tied up with various mobile wallet apps allowing customers to buy, sell and receive vaulted gold from as low as Re 1.)

Purity: Both, MMTC-PAMP and SafeGold, offer gold of 24KT. However, in terms of fineness, MMTC-PAMP offers gold of 99.9 percent purity whereas SafeGold offers 99.5 percent purity. Fineness is defined as the weight of precious metal such as gold in proportion to total weight (inclusive of alloy and impurities). It is expressed in units of parts per 1000. According to World Gold Council’s website, even ‘pure’ gold can contain minute amounts of impurities that the manufacturer can’t remove.

Safety: The gold purchased by you from these platforms is kept in a vault which is fully secured for all the eventualities.

How long you can hold on to the gold: If gold is bought from the MMTC-PAMP platform, then there are no storage charges. One can keep gold for maximum for five years. However, after five years, you are required to either convert it into gold coins or sell it. To avoid making your account inactive, you are required to do one transaction in at least every six months.

Similarly, if you are buying gold from SafeGold using PhonePe, then it is likely that you might have to pay storage charges. These are charged as follows: No charges for the first two years. If the amount of gold is less than 2 grams at the end of two years from the date of your first purchase, then a fee of 0.05 per cent per month is charged. The fee will be deducted at the end of every month from your gold balance.

Features of Gold on PhonePe

a) Buying of gold starts from Re1 or 0.001 grams. However, to sell it, one must have minimum gold worth of Rs 5. You cannot buy and sale on the same day.

b) The gold rate quoted on the app includes custom duties and taxes. There is a differential quoted by MMTC-PAMP and SafeGold due to difference in gold in terms of fineness.

c) The live rate of buying valid for 5 minutes and selling rate for 4 minutes.

d) Currently, one can accumulate up to Rs 2 lakh at any point. To accumulate more, you will be required to undergo the KYC requirements.

e) One can buy gold from both the platforms. Each locker will be separately maintained by them.

f) Conversion of gold into coins/pendants starts from 1 gram. You will be required to pay delivery and making charges, as applicable.

g) The gold coin or a pendant would be delivered in tamper proof packaging.

Features of Paytm’s Digital Gold

a) Minimum value to buy gold starts from Re 1 to maximum of Rs 1.5 lakh. In grams, you can buy a minimum of 0.0005 grams and a maximum of 50 grams.

b) Selling of gold starts from 0.0005 grams or Rs 1. The live price is valid for 7 minutes to complete the transaction.

c) Additional charges will be levied for custody after five years. However, Paytm did not respond on how much those charges are.

d) At the time of sale, you will be required to provide your bank account and IFSC code details. Money will be credited into your account within 72 hours.

e) According to the FAQs section, on any given day, the selling price is lower than buying price because there are certain costs which include taxes, bank charges and others.

f) You can also send gold as a gift to your loved ones.

g) As per Paytm app, you must have a minimum balance in your digital gold account to convert it into coin. MMTC-PAMP coins start from 0.5 gram while Augmont coins start from 0.1 grams.

Recently, Paytm tied up with jewellery stores such as Kalyan Jewellers, PC Jewellers and so on. Now customers can redeem their digital gold by converting it into jewellery.

GoldRush from Stock Holding Corporation

a) Buying of gold starts from Rs 100 and thereafter in the multiples of Re 1. There is no limit on the maximum amount you can invest. However, if the purchase amount exceeds Rs 50,000, then PAN card copy will be required.

b) To buy gold from Stock Holding, you will be required to open an account and complete the KYC process. No registration fees. The form for opening the account is available on the Stocking Corporation website.

c) Settlement of the account will be done via physical delivery of gold. The physical delivery of gold starts from 1 gram in the form of gold coins or bars. To convert fractional units into next full gram, you have to pay additional money and other charges, if any.

d) The gold purchased on your behalf will be kept in a fully secured vault and gold will be credited into your metal account the next day once the payment is received.

e) Withdrawal of gold starts from 1 gram of gold. Making and delivery charges will be additional.

f) There is no limit on the quantity of gold you can accumulate.

What you should do

Digital gold is a convenient way to invest in gold. However, while deciding on which provider to opt for, you should compare the various features and charges on the product. Further, as the features of different gold and gold-based investment options available in the market vary quite a bit, buyers need to evaluate these vis-à-vis their needs and financial goals before investing.

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