In my last financial empowerment session, a surprising number of participants were curious about gold and the different ways to invest in it. That interest is what led me to write about this subject.
Digital Gold vs Gold ETFs: If you’ve been thinking about investing in gold without buying jewellery or storing physical bars, you’ve probably come across two options: digital gold and gold ETFs. Both seem similar and both let you invest digitally, but they’re fundamentally different, and knowing how, can save you from financial risk.
What Is Digital Gold? It’s gold you buy through apps like Paytm, PhonePe or Google Pay. You can start with as little as Rs. 1, and the platform claims to store equivalent gold in secure vaults. It’s convenient and popular, with around 120 million users in India. But there’s more one should know.
The regulation problem: Digital gold operates outside any regulatory framework. SEBI cannot regulate it, and neither can RBI. This means no mandatory audits and no guarantee the platform actually holds the gold it claims. If the platform runs into trouble, your money is at risk. SEBI raised concerns when about Rs. 5,000 crore worth of digital gold was being sold annually with zero investor protection. What about Gold ETFs? Gold ETFs invest in 99.9% pure gold and trade on NSE and BSE. They are fully regulated by SEBI with custodians, audits and strict disclosures. Your units sit safely in your demat account.
Using Gold ETFs to balance your portfolio: Gold behaves differently from stocks and often holds steady during market downturns, making it a strong diversifier. Experts typically suggest keeping 5–10% of your portfolio in gold. ETFs make this simple through your regular trading account or SIPs.
The bottom line: Digital gold might seem convenient, but the lack of regulation makes it risky. Gold ETFs offer the same digital convenience with the crucial addition of regulatory oversight and investor protection. If you’re serious about using gold as part of a balanced investment strategy, Gold ETFs are the safer, smarter choice.
At Moneybar, topics like these remind us why open financial conversations matter. Start your conversation today. Download the app from playstore/appstore, sign up and watch your habits begin to shift.
P.S: Your money deserves protection. Choose regulated options.
Paweii Kayina
founder@moneybar.in
Wednesday, December 3, 2025