Key points
- Gold bought through Save My Gold is not a bank deposit, earns no interest and is not insured by the DICGC.
- It is not guaranteed by SMG, any bank or the Government, and must not be described as risk-free.
- Digital gold is not a security regulated by SEBI and is not a product regulated by the RBI. Regulators, including SEBI, have cautioned the public that digital gold products fall outside their regulatory framework, so the protections that apply to regulated investments do not apply.
- You may get back less than you paid.
Price fluctuation
Gold prices change constantly in response to global markets, currency movements, interest rates, import duties and demand. Prices can fall sharply and stay low for long periods.
Buy–sell spread
The buyback rate is lower than the purchase rate. Together with GST paid on purchase, which is not recovered, this means the price of gold must rise by a meaningful amount before selling back returns what you paid. Selling soon after buying will usually result in a loss.
Liquidity
Sell-back depends on SMG offering buyback quotes. SMG may suspend quotes during extreme market conditions or outages. There is no exchange or secondary market for your holding.
Counterparty risk
You depend on SMG, its supplier, its custodian and its payment partners performing their obligations. If any of them fails, your purchase, allocation or payout could be delayed or affected.
Custody risk
Physical gold held in custody is exposed to risks such as theft, loss, fraud or record-keeping errors. Audit arrangements, once in place, reduce but do not eliminate these risks. Custody and audit arrangements are not yet finalised.
Insolvency risk
If SMG, the custodian or the supplier becomes insolvent, the time and cost of recovering your gold, and whether you recover it in full, will depend on the legal structure of the custody arrangements and on insolvency proceedings. This structure is still being finalised with legal counsel.
Physical coin risks
Once delivered, gold coins are your responsibility to store safely, and loss or theft is not covered by SMG. Coins carry making charges that are generally not recovered when gold is sold, and any buyback of physical coins may involve testing and deductions.
Technical and operational risk
System outages, cyber-attacks, errors in rate feeds, or failures at payment or banking partners may interrupt the Service or delay transactions.
Tax risk
Tax rates and rules, including GST and income tax on gains, may change and may affect the cost or proceeds of your transactions.
Regulatory risk
Laws and regulatory views on digital gold may change. New rules could restrict, alter or end the Service, or change how holdings must be redeemed.
No advice
SMG does not provide investment, financial or tax advice. Consider your own circumstances and, if needed, consult an independent adviser before buying.