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Seven ways to hold gold, across 14 dimensions — regulation, minimum ticket, demat, SIP, GST, storage, spreads, physical delivery, tax framework and the risk that actually bites.
Pick what matters to you and the table keeps only the options that fit. Nothing here is ranked.
Columns shown
Showing 7 of 7 options.
| Compared on | Gold ETFExchange-listed fund that holds physical gold. Bought in a demat account. | Gold mutual fundFund of fund that holds a gold ETF. Bought at NAV, no demat needed. | Digital goldFractional gold bought from a platform, stored by the seller. | Physical goldJewellery, coins and bars — metal you hold. | Gold futuresExchange-traded derivative contract on gold. Trading, not holding. | Gold optionsOptions on gold contracts — defined premium, different risk from holding gold. | Electronic Gold Receipt (EGR)Exchange-traded receipt for gold sitting in a SEBI-registered vault. |
|---|---|---|---|---|---|---|---|
| Investment type | Listed fund holding physical gold | Fund of fund holding a gold ETF | Platform balance representing gold | Jewellery, coins, bars | Exchange-traded derivative | Exchange-traded option | Exchange-traded vault receipt |
| Do you own the metal? | No — the scheme holds it | No — the underlying ETF holds it | Not in hand; a claim on the seller | Yes, in your possession | No — a contract, not metal | No — a right on a contract | Yes, economically — convertible to metal |
| Regulation / framework1 | SEBI (mutual funds) | SEBI (mutual funds) | Not RBI/SEBI-regulated as a security | No SEBI product framework; BIS hallmarking | SEBI (exchange commodity derivatives) | SEBI (exchange commodity derivatives) | SEBI Gold Exchange framework; registered vault managers |
| Minimum investment | 1 unit (roughly gram-scale; varies by scheme) | Usually ₹100–₹500 (scheme-dependent) | As low as a few rupees on some platforms | 1 g coin upward; jewellery by weight | One lot — exchange sets the contract size | One lot's premium | 10 mg at the smallest listed denomination |
| Liquidity | Exchange-traded; depth varies by scheme | Redeem at NAV, not intraday | Only back to the same platform | Sell to a dealer at their buying rate | Near month deepest; others thinner | Near-month, near-the-money only | Exchange-traded; depth varies by contract |
| Demat account needed | Yes | No | No | No | Yes | Yes | Yes |
| SIP / recurring buying | Not directly — some platforms schedule ETF buys | Yes, standard | Yes on platforms that offer it | No | No | No | No |
| GST2 | None on units; 18% on brokerage | None on units; 18% on the AMC's charges | Depends on the platform's structure | 3% on metal; 5% on separately billed making charges | None on the contract; GST on brokerage and charges | None on the contract; GST on brokerage and charges | None on the receipt; GST on brokerage and charges |
| Storage | AMC vaults it — inside the expense ratio | Vaulted under the underlying ETF | Platform stores it; charges vary | Your locker and insurance | Not applicable | Not applicable | SEBI-registered vault manager |
| Buy / sell spread | Exchange bid-ask, can be wider than large-cap equity | None — NAV based (exit load may apply) | Platform's own buy vs sell price | Wide — dealer buy-back sits below retail | Bid-ask plus statutory charges | Bid-ask plus premium spread | Exchange bid-ask |
| Physical delivery | No | No | Some platforms, in larger sizes | It is the metal | Possible on the contract's terms; most positions close out | Exercise can leave you with a futures position | Yes, through the prescribed conversion process |
| Main use case | Low-cost gold exposure inside a demat account | Gold exposure by SIP, without a demat account | Very small, frequent purchases | Possession, gifting and jewellery | Short-term directional or hedging trades | Defined-premium trades and hedges | Exchange price discovery with the option to take delivery |
| Key risk to weigh3 | Tracking difference; thin-scheme spreads | Two layers of expenses on top of gold's price | Seller/custody risk; no securities-market protection | Making charges and resale spread can outweigh gains | Leverage and daily mark-to-market | Premium can expire worthless | A young market — depth and exit price vary |
| Tax framework4 | Listed units: long-term after 12 months, 12.5% without indexation | Unlisted units: 24-month long-term test, then 12.5% | Treated as a transfer of gold — confirm the treatment | Jewellery is a capital asset; long-term after 24 months, 12.5% | Usually business income at slab rates, not capital gains | Usually business income at slab rates, not capital gains | A security — the applicable holding-period test applies; confirm |
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Framework facts, not advice, and not a ranking. Costs and rules change — confirm the current position with the provider before acting.
FAQs
Not as a securities product. SEBI issued a public caution in November 2025 stating that digital gold is not offered through SEBI-regulated gold products, and neither RBI nor SEBI regulates it under a dedicated framework. As of September 2026, the government is reported to be considering RBI/SEBI oversight with a 1:1 physical-backing requirement, but no official framework has been notified. Physical gold, gold ETFs, gold funds and EGRs each have their own, different framework.
An EGR is an exchange-traded security that represents a defined quantity of standardised gold held with a SEBI-registered vault manager. It sits in a demat account like a share, trades on the exchange with public price discovery, and can be converted to physical gold through the prescribed process. Exchange-listed denominations run from 10 mg to 1 kg in 999 and 995 purity.
Both give gold exposure without metal in hand. A gold ETF is a listed scheme whose units you buy on the exchange in a demat account; its price can drift from NAV when the scheme is thinly traded. A gold mutual fund is an unlisted fund of fund that you buy and redeem at NAV, which is what makes a monthly SIP straightforward — but it carries its own expense ratio on top of the underlying ETF's. Neither is better in the abstract; the trade-off is demat-plus-exchange execution against SIP convenience and a second layer of cost.
This is framework, not filing advice. The Finance (No. 2) Act 2024 removed indexation and set a uniform 12.5% long-term capital gains rate. The default long-term holding test is 24 months, and listed securities use a 12-month test — so listed gold ETFs are long-term after 12 months while unlisted gold fund units use 24 months. Jewellery is a capital asset, not a personal effect, so it is taxed on the same capital-gains basis. Exchange-traded derivatives are generally treated as business income at slab rates. Confirm your position with a tax adviser.
There is no single answer, and we do not rank gold products. Most gold instruments track the same metal price, so returns differ mainly by the costs you pay to hold them: expense ratios, making charges, storage, spreads and taxes. Use the comparison to filter by what you actually need and the calculators to price the costs, then decide.
Framework facts reviewed 2026-09-20. Every cell describes a rule or a cost structure, not a recommendation, and none of it is live market data — LetsInvest has no gold price or NAV feed. Confirm the current position with the provider or your tax adviser before acting.