Money Clarity

Is digital gold safe? Who holds it, and what it costs

Is digital gold safe? Most people asking mean: is the gold real? It usually is. A bar sits in a commercial vault, and with a properly run provider an independent trustee holds it on behalf of the customers who bought it. That is the wrong place to look for the risk. What decides whether digital gold is safe for your money is who you can turn to when something goes wrong, and SEBI's answer, given in November 2025, is that it will not be SEBI. Digital gold is metal bought from a company, recorded in that company's ledger and protected by a contract, not by a regulator.

The second risk is quieter and certain. Every purchase pays GST, and every sale happens at a price below the one you bought at. Put in Rs 50,000, with GST at 3 percent and an illustrative 3 percent gap between the buy and sell price, and the holding would fetch Rs 47,087 the moment the purchase completes. Gold then has to rise 6.19 percent just to hand you back your own money.

Below: who holds the metal and what each party answers for, what SEBI actually said, which protections exist and which do not, the day-one cost in rupees, how long break-even takes, a checklist for any provider, and when digital gold is a reasonable choice anyway.

Get Unyfy free See where your money goes

Last reviewed 2026-09-28

Who holds my digital gold: seller, vault, trustee

The technique

Follow the gold, not the app

People judge digital gold by the app they buy it in, because the app is the only party they ever see. It is often not even the seller. The price, the spread and the rules for selling are set by the gold provider the app distributes; the metal sits with a vault custodian; and your claim on it is protected, if at all, by a trustee.

A digital gold purchase involves three roles. The seller is the company that sells you the gold, quotes the buy and sell prices, and keeps the ledger of how many grams belong to you. Many apps do not sell gold themselves; they distribute one provider's product, so the seller named in your terms and conditions may not be the brand on your screen. The vault custodian physically stores the bars, usually a specialised security and vaulting company, and answers for the gold being where the ledger says it is. The trustee is an independent company appointed to hold the gold on behalf of customers, so that the metal is not the seller's asset and is meant to stay out of the seller's creditors' reach if the seller fails.

When you buy, the seller is supposed to acquire the equivalent metal and allocate it in the vault, and the trustee's job is to see that what customers own is backed gram for gram. When you sell, the seller buys your grams back at its own sell price and pays your bank account. When you ask for delivery, the seller has coins or bars made from your holding and ships them, usually for a charge. Notice what is absent from all three steps: an exchange that discovers the price, a clearing house standing between you and the seller, and a regulator that receives your complaint.

Your holding is a line in the seller's ledger, expressed in grams. The protection is that the trustee and the vault can confirm the ledger matches the metal, which is why the audit matters more than how polished the app looks
If the app you use closes but the gold provider carries on, your grams should still be recorded with the provider. Find out now how you would reach the provider directly
If the provider itself fails, the trustee arrangement is what stands between your grams and the provider's creditors. How well that works depends on the trust deed, which few buyers read and which is the document that decides the outcome

The SEBI warning on digital gold, in plain words

On 8 November 2025 SEBI issued press release PR No. 70/2025, titled 'Caution to public regarding dealing in Digital Gold', published at https://www.sebi.gov.in/media-and-notifications/press-releases/nov-2025/caution-to-public-regarding-dealing-in-digital-gold-_97676.html. It makes three points worth reading closely.

First, SEBI already regulates several ways to own gold: exchange-traded commodity derivative contracts, gold exchange traded funds offered by mutual funds, and electronic gold receipts traded on stock exchanges, all bought through SEBI-registered intermediaries. Second, the digital gold sold by online platforms is different: it is neither notified as a security nor regulated as a commodity derivative, it operates entirely outside SEBI's purview, and SEBI warns it may expose buyers to counterparty and operational risks. Third, none of the investor protection mechanisms of the securities market are available for money put into it.

What the caution is not: it is not a ban, it does not say any provider has lost gold, and it does not say the metal is missing. It says that if something goes wrong, the machinery built for securities investors will not be there for you. Whether that matters depends on how much you hold and on how good the provider's own arrangements are.

Counterparty risk means your gold is only as good as the seller's promise to buy it back and the trustee's ability to enforce your claim. Operational risk means errors, outages, fraud or a vault discrepancy, with no securities regulator to escalate to
Digital gold is also not a bank deposit, so deposit insurance does not apply, and it is not a product the banking regulator supervises. Your rights come from the provider's terms, the trust arrangement and ordinary consumer law

Is digital gold safe? The protections you do have

Take away the securities framework and some protections remain. They are contractual and structural rather than regulatory, and they are real if the provider has set them up properly. The gaps are real too. Here is each risk against what covers it and what does not exist for digital gold.

Risk	What protects you	What does not exist
Seller goes out of business	A trustee holding the gold for customers, outside the seller's balance sheet	An investor protection fund to make good a shortfall
Gold short or missing in the vault	A periodic independent audit reconciling grams owed with metal held; vault insurance	A regulator inspecting the vault on your behalf
Seller delays or refuses a sale	The terms and conditions; a consumer complaint	An exchange; a securities grievance or arbitration route
Unfair sell price	Your own comparison with the market price that day	An exchange-discovered price; the seller sets both sides
App closes, provider carries on	Your holding recorded with the provider	An automatic transfer; you must reach the provider yourself

Structural protections depend on the provider's trust deed, vault agreement and audit. Read those, not the product page.

The strongest protection is the trustee, and it is also the least visible. A trustee named in the terms, with a trust deed or its summary you can actually read, is worth more than any number of security badges on a landing page
The weakest point is the sell price. The provider quotes both sides, so the spread is whatever it sets that day. Nothing stops a spread from widening when many people want to sell, which is exactly when you would want to sell too
Consumer law still applies. A seller that does not honour its terms can be taken to a consumer commission, which is slower and costlier for you than a regulator's grievance portal, and for a holding of a few thousand rupees rarely worth the effort

What Rs 50,000 of digital gold loses on day one

The technique

Price the round trip, not the purchase

Buyers look at the gold price and the GST line on the receipt, and stop there. The number that decides whether you made money is the price you can sell at, and it sits below the price you bought at by the spread. GST and spread are both paid the moment you buy, whether you sell tomorrow or in ten years, so the only honest starting value for a holding is what it would fetch today.

Here is the arithmetic for Rs 50,000 leaving your account. GST is taken as 3 percent of the gold value, the rate on gold purchases at the time of writing; check your invoice. The spread is an illustrative 3 percent, meaning the sell price is 3 percent below the buy price. Spreads differ by provider and by day; the method works with whatever your screen shows.

Of the Rs 50,000, the gold is worth Rs 48,544 at the buy price, because 50,000 divided by 1.03 is 48,544, and Rs 1,456 is GST. Sell the same grams straight back at 3 percent below the buy price and you receive Rs 47,087, losing another Rs 1,456 to the spread. The two losses match here only because both are 3 percent of the same gold value. On day one the holding is Rs 2,913 lighter than the money that left your account, 5.83 percent of it.

Rs 50,000 into digital gold, sold the same day

Paid, including GST: Rs 50,000
Gold value at the buy price: Rs 48,544
GST at 3 percent of the gold value: Rs 1,456
Lost to an illustrative 3 percent spread: Rs 1,456
Same-day sale value: Rs 47,087
Gold price rise needed to get Rs 50,000 back: 6.19 percent

GST taken as 3 percent of the gold value, paid at purchase and not recovered on sale. Spread illustrative; the sell price is assumed to stay 3 percent below the buy price as the market moves. Rounded to the rupee.

The break-even rise, 6.19 percent, is larger than the day-one loss of 5.83 percent, because the rise is earned on the Rs 47,087 you could sell for, not on the Rs 50,000 you paid. For your own numbers: divide 1.03 by one minus the spread, then subtract one
If your provider shows Rs 50,000 as the gold value and charges GST in addition, you pay Rs 51,500 and could sell for Rs 48,500 the same day, a Rs 3,000 gap. Same percentages, larger rupees; check which way your screen presents the amount
Neither cost appears later as a charge on any statement. Your holding shows grams, and a valuation that uses the buy price makes it look worth more than it would fetch. Value it at the sell price

Spread and time: when digital gold breaks even

GST is fixed; the spread is the part of the cost that differs between providers, and it moves the break-even more than people expect. Same Rs 50,000 paid, same 3 percent GST, six different spreads. Each extra point of spread costs about Rs 486 on day one and adds about a point to the rise you need.

Spread	Same-day sale value	Day-one loss	Loss as share	Rise to break even
1 percent	Rs 48,058	Rs 1,942	3.88 percent	4.04 percent
2 percent	Rs 47,573	Rs 2,427	4.85 percent	5.1 percent
3 percent	Rs 47,087	Rs 2,913	5.83 percent	6.19 percent
4 percent	Rs 46,602	Rs 3,398	6.8 percent	7.29 percent
5 percent	Rs 46,117	Rs 3,883	7.77 percent	8.42 percent
6 percent	Rs 45,631	Rs 4,369	8.74 percent	9.57 percent

Rs 50,000 paid including GST at 3 percent of the gold value. Spreads illustrative. Break-even rise is 1.03 divided by one minus the spread, minus one.

Time does the rest, if gold rises. At an illustrative steady 12 percent a year, the 6.19 percent break-even takes 6.4 months; at 8 percent, 9.4 months; at 4 percent, 18.4 months. These are not forecasts. Gold has had flat and falling years, and in those the clock does not run at all
After a year at those three rates, the Rs 50,000 would fetch Rs 52,738, Rs 50,854 and Rs 48,971. At 4 percent a year you are still Rs 1,029 short twelve months later. At 8 percent, the gain is Rs 854, a 1.71 percent return in a year when the gold price rose 8 percent
If gold instead falls 5 percent over the year, the Rs 47,087 you could have sold for on day one becomes Rs 44,733: Rs 5,267 lost, 10.53 percent, and more than half of that loss is GST and spread, not the market
Using digital gold as a parking place for money you will need back soon is the costly habit. Move Rs 50,000 in and out three times in a year at a flat gold price and you are left with Rs 41,761. That is Rs 8,239 gone, 16.48 percent, without the price moving at all

How to check any digital gold provider

Before you put in an amount you would mind losing, get answers to six questions from the provider's own documents. The same checks apply whichever app you buy through, because the protections sit with the provider, the vault and the trustee, not with the screen.

Check	A good answer	A red flag
Who the seller is	A named company in the terms, the one that keeps your ledger	Only an app brand; no legal entity named
Trustee	An independent trustee named, with the trust deed or its summary available	'Held securely' with no trustee named
Vault and audit	A named vault custodian, insurance, and a periodic independent audit showing customer grams fully backed	No audit, or one that is old or unpublished
Spread	Buy and sell prices shown side by side before you confirm	Only a buy price; the sell price appears after you commit
Delivery option	Coins or bars in stated sizes, with making and delivery charges quoted in advance	Delivery 'available' with no sizes or charges listed
Redemption terms	How soon sale money reaches your bank, and what happens when any free storage period ends	Silent on storage limits, or a forced sale at the seller's price

Read the terms and conditions and the trust deed or its summary, not the product page. The audit should cover the whole customer holding, not a sample vault visit.

Ask the delivery question even if you never plan to take delivery. Taking the metal out is the one protection that does not depend on anyone else's balance sheet, and a provider that makes delivery straightforward is showing you the gold is there
Keep your own record: the grams you hold, the seller's legal name and your customer reference with the provider, not just the app. If an app shuts, that is what you will need to reach your gold
Selling at a gain is taxable as a capital gain. The holding period and rate are set by the income tax law and have changed in recent budgets, so check the current rules before selling a large holding

When digital gold makes sense, and when it does not

Digital gold is a legitimate way to own a small amount of physical gold without buying a coin across a jeweller's counter. Its costs and the regulatory gap argue against it for larger sums and for a few specific uses, and the most expensive mistake around it has nothing to do with gold.

Reasonable: small regular purchases where a demat account or a fund minimum is not worth setting up, with a plan to hold for years or turn the grams into jewellery or coins. The day-one cost is a percentage, so on a small amount it is a small number of rupees; the digital gold SIP page covers regular buying
Reasonable: saving toward a known gold need, such as jewellery for a family wedding, where you mean to take the metal rather than sell it back. There the spread matters less than the making and delivery charges, so compare those
Weak: larger sums held as an investment. The SEBI-regulated routes named in the press release avoid the purchase GST and come with investor protection, and the digital gold vs gold ETF vs SGB page works through that choice
Wrong: an emergency fund. That money may be needed in the week gold is down, and a single round trip already costs 5.83 percent at an illustrative 3 percent spread; the emergency fund page covers where it belongs
Wrong: while a card balance is running. Rs 50,000 carried on a card at an illustrative 3.5 percent a month plus 18 percent GST on the interest costs Rs 31,261 over twelve months, 62.52 percent. For the same Rs 50,000 in digital gold to match simply clearing the card, gold would have to rise 72.57 percent in that year

How Unyfy helps with digital gold decisions

Two capabilities in Unyfy bear on this page. The first is digital gold itself: it offers 24K gold at 99.9 percent purity through SafeGold, with buy, sell and SIP in the app. Everything above applies to it. It is digital gold, so SEBI's caution covers it exactly as it covers any other platform; each purchase is a payment you authorise; and the provider checklist above is worth running on it like any other.

The second decides whether gold should get the next rupee at all. From bank and card transaction emails and, on Android, transactional SMS, it computes a blended rate across your loans and cards and, on Pro, predicts what the coming month is already committed to. What you see is that blended rate beside the EMIs, premiums and bills due next month, so a card balance costing 62.52 percent over a year is in view before Rs 50,000 goes into metal. When a salary credit rises, it shows how much of the raise is still unallocated, and a visible surplus can be moved into gold in a tap.

Nothing in the app is investment advice, and it never asks for your bank password or UPI PIN. Install Unyfy on Android, or use the web app at app.unyfy.co.in on an iPhone.

Common questions

Is digital gold safe in India?

The gold is usually real; the risk sits elsewhere. Digital gold is sold by a company, stored by a vault custodian and, with a well-run provider, held for customers by an independent trustee. SEBI's press release of 8 November 2025 says it operates entirely outside SEBI's purview and that no securities-market investor protection applies. So it is as safe as the provider's trustee arrangement, vault audit and terms, and on Rs 50,000 it costs Rs 2,913 on day one with 3 percent GST and an illustrative 3 percent spread.

What did SEBI's warning on digital gold say?

PR No. 70/2025, dated 8 November 2025, said digital gold products offered by online platforms are neither notified as securities nor regulated as commodity derivatives, operate entirely outside SEBI's purview, and may expose buyers to counterparty and operational risks. It added that none of the securities market's investor protection mechanisms apply. It pointed to the gold products SEBI does regulate: exchange-traded commodity derivatives, gold ETFs and electronic gold receipts. It is a caution, not a ban.

Is digital gold regulated in India?

Not by SEBI, which said so in its November 2025 caution. It is not a bank deposit either, so deposit insurance does not cover it and the banking regulator does not supervise it. What governs it is the provider's terms, the trust deed with an independent trustee, the vault agreement and ordinary consumer law. That makes the provider's own arrangements the thing to check: a named trustee, a published independent audit, and clear sell and delivery terms.

Who holds my digital gold if the app shuts down?

The metal should be in a vault, held by a trustee for customers, and recorded in the gold provider's ledger, not the app's. If only the app closes, your grams remain with the provider and you reach them directly, so keep the provider's name and your customer reference. If the provider fails, the trust deed decides how customers get their gold or its value, and there is no investor protection fund behind it. Read the deed or its summary before you buy.

How much does digital gold cost to buy and sell?

Two costs, both paid at purchase. GST at 3 percent of the gold value, and the spread between the buy and sell price, which the provider sets. On Rs 50,000 paid, an illustrative 3 percent spread leaves Rs 47,087 on a same-day sale: Rs 1,456 of GST and Rs 1,456 of spread. At a 1 percent spread the day-one loss is Rs 1,942; at 6 percent, Rs 4,369. If GST is charged in addition to Rs 50,000 of gold, you pay Rs 51,500 and could sell for Rs 48,500.

How long does digital gold take to break even?

With 3 percent GST and an illustrative 3 percent spread, the gold price has to rise 6.19 percent before a sale returns what you paid. At an illustrative steady 12 percent a year that takes about 6.4 months; at 8 percent, 9.4 months; at 4 percent, 18.4 months, and after a year at 4 percent Rs 50,000 is still Rs 1,029 short. If gold is flat or falls, there is no break-even date at all, which is why digital gold does not suit money you may need soon.

Digital gold is real gold held outside the regulatory system. Whether it is safe for you depends on the trustee, the vault audit and the seller's terms, which you can check, and on its costs, which you cannot avoid: Rs 50,000 put in would fetch Rs 47,087 the same day at an illustrative 3 percent spread, and gold must rise 6.19 percent before you see your money again. Hold it for small amounts and long periods, not as an emergency fund and not while a card balance compounds. Informational page, not financial advice. Spreads, charges, storage terms and delivery options differ by provider and change over time, and the GST rate is stated as at the time of writing. The provider's terms and trust deed govern, not this page.

Get Unyfy free

Banks and NBFCs we compare

Unyfy compares offers from these lenders and earns a commission if you take one. The comparison is shown first, and it can tell you not to switch.

Axis Bank