Gold is one of the most precious metals. Since the beginning of 2025, its prices have been skyrocketing and breaking records. Despite gold being so expensive, there are investment options available even for Rs 10-20. We are talking about digital gold, which has grown rapidly. However, how safe an investment it is can be gauged from SEBI’s warning. Let us explain the disadvantages and risks of buying e-gold…
You can buy e-gold for just Rs 1 or Rs 10
Gold is deeply rooted in tradition in India and investment in gold, which is considered a safe investment, is also increasing rapidly. However, a lot has changed. Whereas earlier people preferred to buy physical gold, now the trend of buying digital gold has increased rapidly. This is because unlike store-bought gold, you don’t need to spend a lot of money on it. You can buy gold for Rs 10 or Rs 20, and not only that, you can get 24 carat pure gold for just Rs 1. And that too sitting at home, with just one click on your mobile phone through UPI.
What is the process of digital gold?
When you buy digital gold through Paytm, PhonePe or any other platform, 24 karat gold equal to your investment is booked in your name and stored in a safe. You can buy as much gold as you want and whenever you want, you can withdraw this e-gold as physical gold by converting it into coins or bars.
So many charges, then it will reach you
That’s the only thing you need to pay attention to. In fact, the gold purchased with your investment is subject to a number of charges, most of which are hidden and generally unknown to the investor. There are a number of charges involved, including delivery and shipping charges, delivery charges from the platform you purchased e-gold from, and payment gateway charges. On purchases of digitally purchased gold, just like physical gold, a storage charge of up to 2 or 3 per cent and 3 per cent GST is added to its value. Shipping charges and wallet storage charges also apply upon delivery. Some e-gold providers also charge for storage beyond the permitted limit. After adding these expenses, the gold you purchased turns out to be more expensive than the gold ETF itself. There are many risks involved in investing in it.
First Risk: You can calculate your investment and profitability without taking into account all the charges incurred when buying digital gold. However, the risk of losing your money is also considerable. SEBI has issued a stern warning clarifying that if you are cheated, you cannot file a claim with the market regulator, as digital gold is not regulated. Unlike mutual funds or banks, no guarantees are provided.
Second risk: According to SEBI, investors will be responsible for the losses incurred by investing in digital gold. If the e-gold provider closes his shop and runs away, no one will have the right to make any legal claim. The private vaults in which the gold sold to you by these providers is stored may become insolvent, putting your investment at risk. This means that if the provider, refiner or company associated with the vault fails, your deposits could be at risk.
Third Risk: Another major problem arising from non-regulation of e-gold providers is the holding limit. There is no legal holding limit; The platform from which you buy digital gold sets its own limitations, which are usually a maximum of five years. After this limit, you will have to sell your e-gold deposits and pay arbitrary fees.