Digital Gold vs Gold Bonds – Which one is better?
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Digital Gold vs Gold Bonds – Which one is better?
Gold in India, it's more than just an investment, it's woven into our traditions, celebrations, and cultural identity. But with the times changing, so are the ways we acquire this precious metal.
Gone are the days of solely visiting crowded jewellers. Today, we have two exciting options: Digital Gold and Sovereign Gold Bonds (SGBs). But with both boasting their own set of advantages, choosing the right one can feel like navigating a bustling gold market!
Worry not! This blog by IndiaLends Gold will be your friendly guide, explaining the nitty-gritty of both Digital Gold and SGBs. We'll help you understand their features, benefits, and drawbacks, so you can make an informed decision that best suits your financial goals.
Let's dive in!
Understanding Digital Gold: Convenience at Your Fingertips
Imagine buying gold as easily as you shop online! That's the magic of Digital Gold. It allows you to invest in small denominations, even as low as ₹1. Perfect for those who want to start small or build their gold portfolio gradually.
Benefits of Digital Gold:
Convenience: Buy and sell 24/7 from the comfort of your phone.
Flexibility: Invest in any amount, anytime.
Security: Your gold is stored securely in insured vaults.
Transparency: Live gold prices ensure fair buying and selling.
Sovereign Gold Bonds (SGBs): The Government-backed Option
SGBs are essentially gold bonds issued by the Government of India. They offer a safe and reliable way to invest in gold, with the added benefit of interest payments (currently 2.5% p.a.).
Benefits of SGBs:
Government Guaranteed: Backed by the Government of India, offering security.
Interest Income: Earn regular interest payments on your investment.
Tax Benefits: Interest earned is taxable as per income tax slab. Capital gains tax applicable on redemption after maturity (8 years) is subject to certain conditions.
Things to Consider with SGBs:
Lock-in Period: Minimum investment period of 5 years (with an exit option after 8 years).
Lower Liquidity: Compared to Digital Gold, SGBs have lower liquidity in the secondary market.
Demat Account Required: You'll need a Demat account to buy and sell SGBs.
So, Which One Should You Choose?
The answer depends on your investment goals and preferences. Here's a quick guide:
For Flexibility and Convenience: Choose Digital Gold if you want to buy and sell frequently or prefer smaller investments.
For Safety and Regular Returns: Opt for SGBs if you prioritize government backing, guaranteed interest, and a longer investment horizon (over 5 years).
Both Digital Gold and SGBs offer excellent ways to own gold. By understanding their features and aligning them with your goals, you can make an informed decision and add that golden shine to your portfolio!
Ready to Start Your Gold Journey?
IndiaLends Gold offers a seamless platform to invest in Digital Gold. Visit our website or app to explore our offerings and start your golden journey today!
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FAQ’s
Loan against mutual funds (LAMF) allows you to borrow cash against your mutual fund investments as collateral. You can use Volt Money to lien mark your mutual funds digitally to avail an instant limit without losing the ownership of your mutual funds and all the associated benefits with it. Funds will be made available in the form of an overdraft facility.
The annual fee for the Axis Privilege Card is typically Rs. 1,500 plus taxes. This fee can be waived if the cardholder achieves an annual spending milestone, though the exact spending amount for the waiver can vary by card variant. For example, a common waiver condition is spending above Rs. 2.5 lakh in an anniversary year.
Luxe Vouchers are digital gift cards that can be redeemed across popular luxury and lifestyle brands such as Myntra, Flipkart, Pantaloons, and more. Once you qualify for the offer, the voucher code will be sent directly to your registered email ID or mobile number. In most cases, vouchers are delivered within 5–7 working days after successful validation of your transaction or application.
Yes, you can apply even with a low CIBIL score, but your chances of approval may be limited. Most banks and lenders prefer a CIBIL score of 750 or above for quick approval and better interest rates. If your score is lower, some lenders may still consider your application based on other factors such as your income, employment stability, or existing relationship with the bank. However, you may be offered a lower loan amount or higher interest rate. Improving your credit score before applying can increase your chances of getting approved on favorable terms.