Adults can invest in fractional digital gold for children by setting up monthly payments or making one-off deposits via the Little Treasures account offered by The Royal Mint.

The online precious metal account allows investors to buy fractional gold to the nearest 0.001 ounce (DigiGold), subject to a minimum order value of £25, though there’s no maximum.

While the money that is paid into the account is used to purchase physical gold, as investors are buying fractional portions of larger bars, it can’t be held physically or delivered.

However, the physical gold bars that back the gold within Little Treasures is stored onsite at The Royal Mint’s vault.

It acts as a custodian for the gold, but account holders can maintain the account until they’re ready to gift it to children or grandchildren, or even keep or trade the DigiGold for themselves.

Investors can sell the gold back to The Royal Mint for cash, redeem the digital gold for physical gold coins or bars (by selling it back to The Royal Mint and using the money to buy physical products) or by transferring the holdings to another account.

There are three charges associated with buying DigiGold via Little Treasures:

• Purchase: 0.33%
• Storage: 0.5% plus VAT
• Sell: 1%.

It’s important to note that as gold is a commodity, the price can go up as well as down so if the price falls, the value of your holding will also decrease.

Further, Little Treasures isn’t protected by the Financial Services Compensation Scheme (FSCS) and The Royal Mint isn’t authorised by the Financial Conduct Authority. DigiGold is also an unregulated product. However, it attracts capital gains tax.

‘Help secure a child’s financial future’

Andrew Dickey, divisional director of precious metals at The Royal Mint, said: “One of the most precious gifts you can give any child is to help secure their financial future. Backed by the reputation of our gold bullion bars, a store of wealth trusted by banks and intermediaries all over the world, we’ve designed a digital gold accumulation account where you can save for the next generation. Investors can watch their loved ones grow knowing they’re building a golden nest egg to help give them the best possible start in life.

“It is really interesting to see that Brits are planning to gift differently this Christmas, in light of how the world has changed.  And, at a time when planning for our children’s future is more important than ever, our new Little Treasures investment product will allow parents, grandparents and loved-ones to invest a little each month in gold – a precious metal that’s increased in value over time.”

The value of gold has risen from £674 per ounce in 2010 to a high of £1,574 in 2020 – an increase of 133.5%. The Royal Mint saw record sales of physical and digital gold in 2020.