Is digital gold safe compared with physical gold?
Digital gold carries platform risk because it sits outside SEBI regulation. SEBI said on 8 November 2025 that digital gold is neither a security nor a commodity derivative. Securities-market investor protections therefore do not apply to it.
Physical gold carries theft and loss risk, which you manage through storage and insurance. Ask these four questions before you buy digital gold:
- Who holds the gold, and in which vault?
- Does insurance cover your holding? Get the terms in writing.
- What are the sale and redemption terms, including the buy rate and sell rate?
- Where do you complain if the platform fails? No SEBI grievance mechanism applies.
For physical gold, buy hallmarked jewellery and check the HUID code with the BIS Care app. Keep the gold in a bank locker or a home safe.
What is digital gold?
Digital gold is gold that you buy online in small amounts, and the platform's custodian holds it for you. Your holding is recorded electronically, and its value follows the market price of gold. Read what is digital gold for the full explanation.
Digital gold offers four practical benefits:
- You can buy a fraction of a gram.
- You need no home storage.
- You can buy and sell online at any time the platform is open.
- You can track your holding and its value online.
To see how demand has moved, read about gold investment trends.
How is the digital gold rate today set?
Each platform sets its own digital gold rate, and the rate follows the market price of gold. Compare the platform's buy rate and sell rate before you invest. Check the live gold rate on the live gold rate page.
Physical gold prices differ by jeweller because making charges differ. Ask for an itemised bill that separates gold value, making charges and GST.
What is physical gold?
Physical gold is gold that you hold in the form of jewellery, coins or bars. You can store it, gift it or pledge it for a gold loan.
Physical gold offers four practical benefits:
- You own the asset directly, with no platform in between.
- You can wear or gift it, and families often pass it on.
- You can sell it to a jeweller or dealer.
- You can pledge it for a gold loan instead of selling it.
The costs are making charges on jewellery, GST of 3% and storage. Check the hallmark and the purity mark before you buy, such as 916 for 22 carat gold.
How are digital gold and physical gold taxed?
Both carry GST of 3% on purchase. On sale, both follow the same capital gains rules for transfers on or after 23 July 2024.
| Holding period | Treatment of gain | Rate |
| 24 months or less | Short-term capital gain, added to your income | Your income tax slab rate |
| More than 24 months | Long-term capital gain | 12.5%, without indexation |
Pledging gold for a loan is not a sale, so the pledge itself creates no capital gain. See the tax benefits of gold loan page for how loan interest is treated. Check your own position with a tax professional.
How do I buy digital gold or physical gold?
Follow these steps for each type.
Physical gold:
- Buy from a bank, a bullion dealer or a jeweller, and ask for a written invoice.
- Check the purity mark, the BIS hallmark and the HUID code.
- Store the gold in a bank locker or a home safe.
Digital gold:
- Read the platform's terms on purity, custodian, insurance and redemption.
- Compare the buy rate and sell rate across platforms.
- Confirm how you complain if something goes wrong, since SEBI's grievance mechanism does not apply.
The difference between digital gold and physical gold lies in who holds the gold, who regulates the product and what you can pledge.
Can you use digital gold for a gold loan?
No. Bajaj Finance does not offer a digital gold loan, and it does not accept digital gold as collateral. The Reserve Bank of India (RBI) recognises only gold jewellery, ornaments and coins as eligible collateral for a gold loan.
Bajaj Finance accepts 18-22 karat jewellery and ornaments, and 24 karat gold coins. If your digital gold platform offers redemption as coins, ask for the terms. Eligible coins can then be pledged, subject to valuation.
What gold loan can you get against physical gold?
Bajaj Finance Gold Loan offers amounts from Rs. 5,000 to Rs. 2 crore. Interest starts from 9.50% p.a., and tenure runs from 1 day to 12 months. See the options for a gold loan in India before you compare lenders.
The lender values your gold at the lower of two prices: the previous day's closing price, or the 30-day average closing price. The India Bullion and Jewellers Association (IBJA) or a SEBI-regulated commodity exchange publishes both. Track the gold value trend to time your pledge.
Loan to Value (LTV) is the maximum share of your gold's value that the lender gives as a loan. The RBI caps it by loan amount. To know about LTV in detail, click here.
Worked example. Rohan, 34, is a salaried professional in Delhi. His physical gold has an eligible value of Rs. 2,00,000 after valuation. At 85% LTV, his maximum loan is Rs. 2,00,000 x 85% = Rs. 1,70,000. Branch valuation and credit assessment decide the final amount, so this example is not an offer.
You are eligible if you meet these conditions:
- You are a salaried or self-employed individual, or a pensioner.
- You are an Indian citizen residing in India.
- Your age is between 21 and 80 years.
RBI limits apply to what you pledge:
- Ornaments: total pledged weight across all loans cannot exceed 1 kilogram.
- Gold coins: total pledged weight cannot exceed 50 grams.
- Total loan exposure across ornaments, jewellery and coins cannot exceed Rs. 2 crore.
Plan your repayment with the gold loan calculator. See fees and charges for the current amounts.
Quick tip: Wondering how much you can borrow on your gold? Just check your gold loan eligibility—it takes seconds and minimal paperwork!
