Ways to invest in gold in India

What are the ways to invest in gold in India?

You can invest in gold through physical gold, digital gold, gold ETFs, gold funds of funds, Electronic Gold Receipts or Sovereign Gold Bonds. Physical gold means jewellery, coins and bars that you hold yourself. Digital gold is gold a provider holds for you.

A gold ETF (exchange traded fund) is a mutual fund that keeps at least 95% of its assets in gold and gold-related instruments. Its units are bought and sold on the stock exchange, like a share. A gold fund of funds is a mutual fund that keeps at least 95% in a gold ETF. An Electronic Gold Receipt is a receipt for gold held in a vault. A Sovereign Gold Bond is a government security counted in grams of gold: RBI issues it on behalf of the Government of India.

Gold itself pays no interest or dividend, so any gain comes only from a change in its price. Sovereign Gold Bonds already issued pay 2.5% a year on the amount invested until they are redeemed.

Koshex, an app run by an AMFI-registered mutual fund distributor, lets you buy gold funds of funds as regular plans and also offers digital gold. A distributor is a registered intermediary that helps you buy and manage funds, and a regular plan is the version of a fund bought through one. Koshex holds ARN-154632.

Digital gold is not regulated by SEBI. In November 2025 SEBI said such products are "neither notified as securities nor regulated as commodity derivatives" and that its investor-protection mechanisms do not apply to them. Gold ETFs and gold mutual funds are SEBI-regulated.

How do the ways to own gold compare?

The forms differ most on who holds the gold and who regulates it. Purity is how much of the metal is gold, and a slab rate is the tax rate for your income band.

A jeweller's saving scheme is a purchase plan, not an investment in the gold price: you pay monthly and buy jewellery at the end.

Some pairs have their own comparisons: digital gold vs physical gold, digital gold vs gold mutual funds and ETF vs FoF. The gold funds page lists the funds of funds.

How can you invest in gold without a demat account?

A gold fund of funds needs no demat account, while a gold ETF and an Electronic Gold Receipt need one and a broker. A demat account holds your securities in electronic form, and a broker is the SEBI-registered firm through which you buy and sell them on the stock exchange (demat account explained). Buying from or selling to the fund house directly is allowed only above ₹25 crore. One fund house's document for its silver ETF says the smallest purchase is one unit.

You buy a gold fund of funds like any other mutual fund, as a regular plan through a distributor such as Koshex. A SIP, which invests a fixed amount at regular intervals, usually monthly, needs neither a demat account nor a broker in a gold fund of funds. Gold SIP explains how those work.

SEBI caps the total cost of a gold fund of funds, including the ETF it holds, at 0.90% a year. That yearly fee, shown as a percentage of your money, is the expense ratio. As of 31 August 2026, the fund houses' own data shows a base expense ratio of 0.47% for HDFC Gold ETF FoF and 0.57% for Tata Gold ETF FoF, regular plans. SEBI sets no exit load for this category. An exit load is a fee some funds charge if you sell within a set time after buying. Many funds charge a small one if you leave early, so check the scheme document.

Koshex offers digital gold from SafeGold (24K, 99.5%) and MMTC-PAMP, starting at ₹100. You can sell any time, and physical delivery is available. The digital gold page has the details.

Which ways to own gold are regulated by SEBI?

Gold ETFs, gold mutual funds, Electronic Gold Receipts and exchange-traded commodity derivative contracts are SEBI-regulated; digital gold is not.

SafeGold's own FAQ says its gold is stored in Brink's vaults and insured while stored and in transit. It adds that an independent trustee checks the vault balance against customers' balances every quarter. Is digital gold safe goes through what to check.

A gold ETF's bars are held by a SEBI-registered custodian, the firm that holds the fund's gold, and the fund's auditors check them every six months.

Each Electronic Gold Receipt represents gold held by a SEBI-registered vault manager, the firm that holds the gold behind each receipt. You keep it in a demat account and trade it on the stock exchange, in units as small as 10 milligrams on NSE.

Every mutual fund shows a riskometer, SEBI's risk label on six levels from Low to Very High, checked every month. HDFC Gold ETF and Tata Gold ETF read High on 31 August 2026. Most listed gold funds also read High on 29 September 2026.

Is buying jewellery a good way to invest in gold?

Jewellery costs more than the gold in it: 3% GST plus making charges. Making charges are what a jeweller adds to the price of the gold for making the piece.

Hallmarking, BIS's certificate of how much gold a piece contains, is compulsory for gold jewellery sold in the 392 districts listed by BIS, as of August 2026. Gold coins and bars are outside that rule. The 24-carat grade in BIS hallmarking is 24KS(995). BIS 916 gold explains the marks.

Is there a new Sovereign Gold Bond issue?

The last Sovereign Gold Bond issue was in February 2024, and RBI has announced no new issue since. Bonds already issued keep paying 2.5% a year. They can be sold on the stock exchange if held in demat form, or cashed in with RBI after the fifth year on an interest date, at a price RBI sets from the average gold price of the three business days before.

The bond runs for eight years and pays fixed interest of 2.50% a year on the initial investment, paid half-yearly. RBI's archive shows SGB 2023-24 Series IV, open from 12 to 16 February 2024, at ₹6,263 a gram.

Take 10 grams bought at that price. That is ₹62,630 invested. The interest comes to ₹1,565.75 a year, or about ₹783 every six months, paid on the amount first invested whatever the gold price does.

The 2.5% interest is taxed at your slab rate every year. No tax is deducted from it, so you have to show it in your return yourself. The gain at maturity is tax-free, but from 1 April 2026 only if you bought the bond when it was first issued and held it until maturity. Bonds bought on the stock exchange do not get this.

The Government stopped taking new medium- and long-term deposits under the gold monetisation scheme from 26 March 2025. Banks may still offer short-term gold deposits if they choose.

How is gold taxed in each form?

A gain is taxed when you sell, and the holding period decides the rate. The holding period is how long you have owned a unit or an item, from the day you bought it to the day you sell it. Past the line below, the profit is a long-term gain; otherwise it is short-term.

• Listed gold ETF units: long-term after more than 12 months.
• Gold fund of funds units: long-term after more than 24 months.
• Physical gold: long-term after more than 24 months.
• Digital gold: long-term after more than 24 months, if the product gives you ownership of gold.

For each of these, the long-term gain is taxed at 12.5% plus 4% cess, an extra charge on the tax. A short-term gain is added to your income and taxed at your slab rate. Surcharge, another extra charge on the tax, applies only above ₹50 lakh of total income, so these rates assume income up to ₹50 lakh.

For gold ETF and fund of funds units, the date you bought them does not change this. No gold form gives a deduction under section 123 (the old Section 80C). Tax on gold covers every form, and how to save tax on digital gold covers that one.

How do you choose between the ways to own gold?

The choice depends on what you want to hold, for how long, and whether you want a SEBI-regulated product.

• Horizon. Koshex suggests 5 years or more for gold funds.
• Demat account. An ETF and an Electronic Gold Receipt need one; a fund of funds does not.
• Who holds the metal. You, a provider, a custodian or a vault manager.
• Cost layers. GST on physical gold, a yearly expense ratio on funds.

On digital gold costs, SafeGold and MMTC-PAMP both say GST is included in the price you pay to buy, and MMTC-PAMP puts it at 3%. Neither charges GST when you sell back.

The Koshex app runs a risk-profile questionnaire. Koshex also helps you choose a fund that suits your goal and timeline. Gold in your portfolio covers the portfolio side.