Is digital gold a good investment for beginners?

Some companies are offering digital gold which will remain under their supervision in the name of the investor and investors can encash it at any time and get it for its value whatever is going on in the market. The problem with this proposition is that what is the guarantee that the company would keep the promises made. We have seen many examples where companies came up with new schemes and lured the investors but later they disappeared from the scene and many gullible investors suffered and lost their hard-earned money. So one has to be very cautious in this regard and go for only some reputed company or reputed bank. It is to be noted that Govt of India also issues from time to time gold bonds for the investors and investors can apply for that through their banks. These bonds are in the nature of digital gold only and will be redeemed after a tenure of 5-6 years at the rate of prevailing gold prices. The good thing is that Govt give a nominal interest of 2.5% per annum on these bonds and I feel that it is a good investment opportunity.
Coming to the point about other avenues for investment, those people who have a small to medium income and want to save on a long time horizon there are some good schemes like recurring deposits in banks and Post Offices, PPF scheme of the Govt where IT rebate is also allowed, NSc/KVP schemes of Post Office, Mutual Funds (Balanced type) etc. One thing that I want to add is that there are some areas where the return is more but the risk is also more like investing in the stock market so one has to think twice before investing there and should not invest one's hard-earned money in risky areas.

This is the new system where digital good system has been floated by companies offering lucrative returns at the end of the period and this digital bond will show their names in favour and whenever they want to encash the same, they are entitled to get back the cash as per prevailing market rates. However one catch is there the companies floating such digital systems cannot be always reliable since in there are numerous companies undertaking such fake business and the investors end up loosing their money. Hence reliability of such investments are questionable.
The better option would be to look for the Gold Bond issued by the government of India and the same can be applied through the bank though the returns per year is around 2.5 % but the final yield is secured and can be cashed back depending upon the needs of the investors.
The other options for your investments could be as follows-
1) Kishan Vikas Patra
2) Mutual Funds Investments such as HDFC, Kotak Mahindra, ICICI etc choosing both debt funds and balanced funds.
3) Recurring Deposit of Post Office for five years for which interest is offered with the latest decision of the government.
Desist from the stock market activities at this juncture since it needs sound knowledge which could be the better option for you and the same can be regained through your touch with consultants operating in the share market.

One should see the genuineness of the company in which a person is planning to invest. It may be a digital gold scheme or any other scheme before investing you should see how good is the company. These days many financial companies are cropping up and they are deceiving the people. So my first advice is to study the history of the company.
Recently the government of India announced the Gold Bonds scheme. Because it is from the government, the scheme is a safe investment only. The bonds can be encashed after the time prescribed and you will get the rate of gold prevailing at that time. This scheme is better than owning physical gold in the following ways.
1. As you are not holding any physical gold. there is no threat of theft or loss of gold.
2. There is no necessity to keep them in bank lockers and hence there is no necessity to pay rental charges for the locker.
3. They will be issued by RBI every month on behalf of the Government of India. So the safety factor is high.
4. The minimum quantity you can invest is 1 gram and the maximum is 4 Kg.
5. The rate of interest you will get is 2.5% per annum. This will be paid once every 6 months.
6. There is no tax on the amount when you redeem the certificate under the capital gains act.
7. The investment is for 8 years. But there is an option for the individual to redeem after completing 5 years.
8. You can redeem the certificates and you will get the prevailing rate at the time of redeeming. They will take the average price of gold for three previous business days.
This is a good scheme for all. You can go ahead. We are seeing always an increase in Gold price and the chances of decreasing are very remote.
There are many other schemes like Mutual Funds. Fixed deposits. PPF. Post office investments, Recurring deposits and share market etc. But as you want to start with a small amount the best is to go for gold bonds or SIPs in Mutual funds. If I were you I will go for gold bonds.

Gold is a very safe investment in principle. It had its importance as a store for value.
I invite your attention to an article n ISC Articles section titled "A beginner's guide to Gold as a better investment".
Gold investment in digital form has become more and more popular.

Rusk factors-Physical Gold vs Digital Gold
Gold in physical form has at least two major risks viz, the risk of theft and the risk of purity. Even in that the risk of safe storage was the main. These two risks have been eliminated in the digital form of gold investment. Hence in the given conditions of all other parameters being same Gold investment in digital form is better.

Convenience: The other favourable point of digital gold investment is the ease of buying. One can buy digital gold investment in small quantities and with small amounts. Unlike gold ornament buying there are no other direct or indirect hidden charges in addition to he declared price. One can invest via Mutual Fund in Gold funds. Here one can buy in small units.
The other similarly convenient way is buying Sovereign Gold Bond. Here the additional attraction is a fixed rate of interest too. But a specification of a minimum holding period is one con in this. Many banks are selling in SGF,
In digital gold investment there are other pro factors like no depletion charges, no making charges no dispute of purity etc. The digital gold is of 24k.

Though Gold is always showing increasing prices, just as there is no risk free investment, gold also subject to market price fluctuations. As still it is a relatively new form of investment there are still some grey areas which are to be cleared only after more and more experience. The digital gold market has still to grow to become more attractive.

But all said and done one can make Digital Gold investment as one of the portfolios n investment. For a beginner it may be tried and started with a small fraction of his indented investment.

Gold is a good recession proof investment and can be considered a good form of investment but as a beginner it will not give you the return you may wish.

If you have just begun your career then you can begin by investing in equity directly and earn a handsome return if held for long term, but in case of gold the return may be limited. Rates of gold increases only when there is more demand and people are afraid of risk assets or else gold may remain stuck at the same value for a long time without any appreciation

Even if you wish to invest in gold then you may consider investing in digital gold or Gold ETF rather than physical gold. One can invest in Gold ETF through their demat account and the amount invested can be as low as Rs. 40 per unit.

You can invest based on your budget and that too in small amount while 8n case off physical gold you may have to invest in thousands in a single purchase.

Investing in digital form of gold is preferred over physical gold for the following reasons:

1. No hassle of keeping gold in locker or any bank locker.

2. No gold making charges at the time of buying or deduction at the time of selling.

3. No danger of it being stolen.

4. Gold ETF are highly liquid and one can get the amount invested in a day while physical gold will have to be sold at a genuine jweller to get correct price.

Decision to buy gold in physical form or digital form is fully upon you and you can take decision based on the advantage explained above.

If you have started your career recently then you should diversify some of your investment to equity or mutual funds as you wish to stay invested for long term.

Yes, gold can be considered one of the instrument for investment. It can give you good amount of returns if invested correctly. Buying gold jewelry has some drawbacks though and I don't think that one should consider jewelry as good investment. It is also considered as the liquid investment since you can sell gold at any time easily and make cash out out of it.

Some drawbacks of investing on physical gold;
1) Physical gold or jewelry has making charges and those are over and above of the gold that you buy.
2) Safety is one concern since the physical gold has to be stored safely and there are chances of theft.
3) When you sell gold, it has some charges towards depreciation.
4) If you plan keep gold in safe deposits, it will incur charges.
5) Some banks also offer the gold coins investment, but if you by these coins from banks you make face difficulty in selling it at the stores since many of the store owners don't accept such coins though they are pure and legitimate.
6) Gold is considered as non financial asset hence physical gold sold in 3 years attracts short term capital gain tax and if sold after 3 years then it attracts long term capital gain tax.

Digital gold has some advantages over the physical gold;
1) Liquidity is high
2) Safe as no physical gold has to carried.
3) No making charges while buying the digital gold or deduction charges while selling it.

There are various ways buy which you can invest in digital gold;
1) Gold ETF
2) Mutual funds
3) Sovereign Gold Bonds

I prefer SGB (Sovereign Gold Bonds) because it offers yearly interest on 2.5% on the invested amount. Also the appreciation in gold prices benefits in appreciation of your invested amount. They can be easily bought through your DMAT account and can be easily redeemed also. It does have lock-in period of 9 years and can be redeemed after 5 years, but you can offer your SGB in the secondary market. Selling SGB in secondary market attracts short capital gain tax but if hold till maturity the it it is tax free.