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How does the concept of digital gold work?

By Finserv MARKETS - Aug 2,2019
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How does the concept of digital gold work

For Indians, gold has been an intrinsic part of our culture and traditions, so much so that long before it seeped into the mainstream financial markets as an investment option, it was considered auspicious for families to buy gold on festival days like Diwali, Dhanteras, Akshay Tritiya, weddings etc. However, as time went by, the financial markets realised its potential as an investment option. But there are several drawbacks to buying real gold, the first being that it is expensive. Secondly, gold needed to be kept in a secure place which involved paying vaults and bank lockers, where the gold would lie unused for years. And the last and crucial one being that not all dealers will buy gold from you – most dealers will buy back only the gold that they have sold themselves. Dealers who buy others’ gold will more often than not offer you much lower rates thus making it a highly unprofitable proposition.

Digital Gold is the new investment opportunity that has taken the Indian markets by storm. It is a cost-effective, convenient, and secure way to buy gold online, by investing in physical gold using digital speed – a method that overcomes all of the aforementioned problems with physical gold, allowing everyone the opportunity to buy, store and sell gold at their convenience. Frankly, gold purchased is the smartest way to invest in gold!

What is Digital Gold & How Does it Work?

Digital Gold is a concept that allows one to invest in 24K gold online, in a simple and secure manner. Investors can buy, sell and accumulate pure gold in small quantities that they can easily afford, anytime and anywhere. Each gram bought by an investor is backed by an actual physical quantity of gold, which can then be stored or just as easily sold back online at market-linked gold rates. With online Gold, you will have the stability and wealth preservation of physical gold while also enjoying the cost-efficiencies and speed of modern technology.

The way this works is that the amount of gold you purchase online will be backed by certified 24K physical gold. The gold purchased is insured and kept safely with a reputed Custodian on a consolidated basis. It is also tested using different parameters such as weight and purity, after which it is accepted in the vault for safekeeping. Thereafter, if at any point you are in need of cash and decide to sell a certain amount of gold from your account, an equal amount of physical gold will be removed from your vault.

Why Invest In Digital Gold?

Digital Gold has quickly become one of the favourite investment options for new India. Here’s why:

You pay only for pure 24k gold:

When you are buying physical gold it is difficult to tell the quality and authenticity of the metal. Hence our mothers and grandmothers would go back to the same jewellers they trusted time and again, but even then when you are buying a piece of jewellery you’re also paying for the other amalgamated precious metals and stones and gems studded into the piece. With digital gold, however, this is not the case – every rupee you pay is used to purchase gold of the finest quality that is of 24K, 99.5% purity.

Trade your gold according to your convenience:

Buying physical gold is not the most efficient option for an investor because not only is it time-consuming and inconvenient, you also have to physically visit a jeweller or a bank to make the actual purchase. With Gold, however, you can buy and sell gold online anytime and anywhere as per your comfort. With Finserv MARKETS, buying or selling gold online is just a two-step process, thus saving you a lot of time and energy.

Convert ’Gold’ into ‘Cash’ instantly:

One of the biggest advantages of Digital Gold is that you can sell it online anytime and anywhere. Once you sell the desired amount of gold from your account successfully, the amount in cash will be deposited in your registered bank account in just a few hours. While in case of physical gold, to liquidate it you will need to visit the seller who may or may not want to indulge you, particularly if he was not the original seller, and then wait on them to actually get the money.

Digital Gold investment is thus by far a much safer investment option than physical gold could ever be. Finserv MARKETS is a trusted online Gold partner for more than 100 million customers across the country. A 2-click buying process is facilitated by Finserv MARKETS, without the need for any kind of documentation, making the process fast and convenient.

Finserv MARKETS, from the house of Bajaj Finserv, is an exclusive online supermarket for all your personal and financial needs. We understand that every individual is different and thus when you plan to achieve your life goals or shop for the gadget of your dreams, we believe in helping you Make it Happen in a few simple clicks. Simple and fast loan application processes, seamless, hassle-free claim-settlements, no cost EMIs, 4 hours product delivery and numerous other benefits. Loans, Insurance, Investment and an exclusive EMI store, all under one roof – anytime, anywhere!


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Bajaj Finserv Direct Limited ("BFDL") is primarily engaged in distribution of financial products and services through its digital platform (“Bajaj Finserv MARKETS”) and inter alia renders services of customer acquisition, providing preliminary credit support activities, fulfilment services and post-acquisition customer services to Banks, NBFCs, HFCs. BFDL is also a registered Corporate Agent (Composite) under valid IRDAI registration number: CA0551 valid till 10-Apr-2024 for solicitation and servicing of Insurance Products. Registered Office: Bajaj Auto Limited Complex, Mumbai – Pune Road, Akurdi, Pune – 411 035 CIN: U65923PN2014PLC150522