5 Best Ways To Invest in Gold in India

5 Best Ways To Invest in Gold in India

How To Invest in Gold

Gold is one of the most liked investments in India snd there are many ways to invest in gold in India.

In an Indian household, gold jewellery is not just used as wearable but also helps in financial emergencies.

Indian households holds around 24,000 tonnes of gold according to the World Gold Council.

This makes indian households the world’s largest hoarders of gold.

Gold Reserve (Indian HouseHold vs Government)
Gold Reserve (Indian HouseHold vs Government)

There are so many options available now for investing in gold like Gold ETFs, Gold Mutual funds, Digital Gold, Sovereign Gold Bond.

So let’s find out which is the best way to invest in gold.

Why Should You Invest in Gold in India?

Investing in gold is worth it because it is the most liquid and safest investment option.

Gold has an opposite relation with equity investments.

For example, if the stock markets go down, the price of gold will go up.

Investing in gold will help you in diversifying your portfolio.

How to Invest in Gold in India?

There are 5 Ways to Invest in Gold.

Each investment option has its own advantages and disadvantages.

1. Invest in Gold via Physical Gold

Normally, we Indians hold gold in the form of jewellery, coins and bars(biscuit).

You can buy physical gold by going to any jewellery shop.

The advantage of owning physical gold is that you can wear this gold. It’s good for health as per our culture.

The disadvantages of owning gold in physical form are robbery, high costs and outdated designs.

If you hold jewellery, you additionally have to pay the making charges of up to 15% of the gold price

Pros 👍🏻 :

  • You Can Wear This Gold.
  • Don’t Need Any Type Of Paperwork.

Cons 👎🏻 :

  • No Charges Other Than Gold Itself And Its Making Charges.
  • Risks Of Theft

2. Invest in Gold via Sovereign Gold Bond

The second way of Investing in Gold is through Sovereign Gold Bond.

Sovereign Gold Bond is Issued by The Government of India and RBI.

The minimum investment under this scheme is 1 gram.

SgSGBb also offers a 2.5% interest rate on your investment.

Sovereign Gold Bonds can be stored in Demat form or paper form.

The main disadvantage of SGB is that the tenor of these bonds is 8 years.

SGBs are listed on Stock Exchanges so you can trade these bonds on BSE and NSE.

You can also use these bonds for collateral for loans.

Learn More About Sovereign Gold Bond

Pros 👍🏻 :

  • Tax-Free Capital Gains at Maturity.
  • Minimum Investment of Just 1 Gram
  • 2.5% Interest on Investment Value

Cons 👎🏻 :

  • 8 Year Lock-In Period.

3. Invest in Gold via Digital Gold (E-Gold)

The third option is investing in digital gold via platforms like PayTM, PhonePe, Google Pay or Me-Gold (Motilal Oswal).

This is a facility offered By MMTC-PAMP Pvt. Ltd, A Joint venture By MMTC Ltd. and Switzerland-based Bullion Brand PAMP SA.

The best part about investing via this platform is that it’s easy to use.

You can purchase gold as low as ₹1.

Your Gold is stored in safe storage under the supervision of MMTC-PAMP Pvt. Ltd with full Insurance.

You can also take delivery of this gold in the form of gold coins and bars.

Pros 👍🏻 :

  • Can be Purchased in Small Quantities
  • Safe and Insured
  • Can Take The Physical Delivery of Gold
  • Transparency in Pricing

Cons 👎🏻 :

  • Profit is Taxable as Per Your Tax Slab

4. Invest in Gold via Gold ETFs

Gold ETFs are Exchange Traded Funds that you can trade on stock exchanges.

You can buy Gold ETFs online and keep it in your Demat Account.

Here one Gold ETF unit Is equal to one gram of gold

You need to buy a minimum of 1 unit(1 gram) of gold ETF.

If you plan to invest in gold via this method then please note that there are some charges like asset management fee (around 1% expense ratio) and charges of the broker.

Pros 👍🏻 :

  • Cost-Efficient (No Making Charges)
  • Buy at The International Rate Without any Markup
  • Unlike Physical Gold, There is No Wealth Tax on Gold ETFs in India
  • No Risk of Theft

Cons 👎🏻 :

  • Need to Have a Demat Account
  • Asset Management Fee (Around 1% Expense Ration)
  • No SIP Option

5. Invest in Gold via Gold Mutual Fund

Gold mutual funds usually invest in stocks of gold producing and distributing companies, physical gold and stocks of mining companies.

You can invest any amount of money in a gold mutual fund and get an equivalent amount of mutual fund units.

You can also start a SIP(Systematic Investment Plan).

Pros 👍🏻 :

  • Don’t Need a Demat Account.
  • SIP Option Available
  • No-Risk Of Theft

Cons 👎🏻 :

  • Price is Not Directly Linked to Gold Price.

Comparison of Physical gold, Gold ETF,Gold Mutual Funds and Sovereign Gold Bond
Comparison of Physical gold, Gold ETF,Gold Mutual Funds and Sovereign Gold Bond


If you are planning to invest for the long term then the Sovereign Gold Bond is the best option for you.

Investing in physical gold like jewellery is only wise if you are planning to use it.

Gold ETFs and mutual funds are good if you need liquidity.

Make sure you do not invest more than 10-15% of your portfolio value in gold.

Let me know in the comments if you have any question regarding this topic.


How to Invest in Gold?

You can invest in Gold via u003cstrongu003eSovereign Gold Bondu003c/strongu003e, u003cstrongu003eGold ETFsu003c/strongu003e, u003cstrongu003ePhysical Goldu003c/strongu003e, u003cstrongu003eGold Mutual Fundu003c/strongu003e, u003cstrongu003eDigital Goldu003c/strongu003e from PayTM, PhonePe.

Is Investing in Gold Good?

Yes, Investing in Gold is Good and Safe as Long as You Do not Invest More than 15-20% of Your Portfolio in Gold.

How to Invest in Gold Online?

You Can Invest in Gold Online via Sovereign Gold Bond, Paytm,PhonePe,Google Pay or Buying a Gold ETFs and Gold Mutual Funds.

How to Invest in Gold Bonds?

You can Invest in Gold Bond via Your Stock Broker or Bank Account’s Net Banking.

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