Physical gold
Tangible and familiar, but you pay making charges (for jewellery), face purity and storage concerns, and get lower resale value. Best treated as consumption, not investment.
Gold ETFs
Units that track the gold price, held in your demat account. Easy to buy and sell on the exchange, transparently priced, and free of storage worries — but they carry a small annual expense.
Sovereign Gold Bonds (SGBs)
Issued by the RBI on behalf of the government. They track the gold price and have historically paid a fixed annual interest on the invested amount — something neither physical gold nor ETFs offer. They have a defined tenure with an exit window and specific tax treatment on maturity. The trade-off is lower liquidity than an ETF if you want out early. New SGB tranches are issued periodically, so check current availability.
FAQs
Historically SGBs have paid a fixed rate of interest per year on the amount originally invested, in addition to tracking the gold price. Confirm the rate for the current tranche.
A Gold ETF is generally easier to buy and sell on the exchange at any time. SGBs have a defined tenure with specific exit windows, so they are less liquid if you want to exit early.
Physical gold has making charges, storage and purity considerations that reduce its efficiency as a pure investment. Many investors keep it for personal use and use SGBs or ETFs for investment exposure.
Educational content for general awareness only — not investment, trading or tax advice. Investments in securities market are subject to market risks; read all related documents carefully. Rules and rates are indicative for FY 2025-26 and may change.