Gold is a timeless favourite for Indian investors. For decades, families have bought gold jewellery and coins to safeguard wealth and pass it on to future generations. But today, investing in gold is much easier, safer, and more flexible than ever before.
You no longer need to stick only to jewellery. You can choose smarter options like Sovereign Gold Bonds (SGBs), Digital Gold, and Gold Exchange Traded Funds (ETFs) to add gold to your portfolio in a modern way.
Here’s how each option works, its key benefits, and what you should keep in mind before investing.
1. Sovereign Gold Bonds (SGBs): Gold with Extra Income
What are SGBs?
SGBs are government-backed bonds issued by the Reserve Bank of India. When you buy SGBs, you are not buying physical gold. Instead, you hold a bond whose value is linked to gold prices.
Key Benefits:
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Extra Earnings: SGBs pay 2.5% annual interest on your invested amount. This is paid twice a year directly to your bank account.
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Tax Advantage: If you hold the bonds till they mature (8 years), any capital gains are tax-free.
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Safe to Hold: You don’t have to worry about storing physical gold or checking purity.
Things to Note:
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SGBs have an 8-year tenure, but you can exit after 5 years.
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They are listed on stock exchanges, but trading volumes are not always high, so selling early may not always be easy.
2. Digital Gold: Small, Simple, Flexible
What is Digital Gold?
Digital Gold lets you buy small amounts of pure gold online through apps or websites. Your gold is stored safely by the seller in a certified vault. Many investors today prefer Digital Gold for its ease and convenience.
Key Benefits:
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Start Small: With Digital Gold, you can buy gold starting from just ₹1 and add more whenever you like.
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Available Anytime: You can buy or sell Digital Gold 24/7 from your phone or laptop.
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Physical Delivery: You can convert your Digital Gold into coins or jewellery if you ever want it in physical form.
Things to Note:
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There is no interest income your returns from Digital Gold depend only on how gold prices move.
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Some platforms may charge storage fees if you hold Digital Gold for a long time.
3. Gold ETFs: Trade Gold Like Shares
What are Gold ETFs?
Gold ETFs (Exchange Traded Funds) are mutual fund units that track the price of gold. One unit usually represents one gram of gold.
Key Benefits:
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Easy to Trade: You can buy or sell ETF units anytime during market hours if you want to trade gold like shares instead of holding Digital Gold.
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Transparent Pricing: Prices move with real-time gold rates.
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No Storage Hassles: The gold is securely held by the fund, unlike physical gold or even Digital Gold where vault costs may apply.
Things to Note:
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You need a Demat and trading account to invest in Gold ETFs.
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Expense ratios and brokerage charges apply.
Which Option Should You Pick?
There is no single right answer. The best choice depends on why you want to add gold to your portfolio.
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Pick SGBs if you plan to hold gold for the long term, want interest income, and wish to save tax.
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Pick Digital Gold if you want flexibility and like starting small. Digital Gold is best suited for people who want to build a gold habit gradually.
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Pick Gold ETFs if you have a Demat account and prefer to trade gold like stocks while keeping some Digital Gold for convenience.
Combine Options for Better Diversification
Many investors mix these options for smart diversification. For example:
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Hold SGBs for long-term growth and tax savings.
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Use Digital Gold to buy gold whenever prices look attractive and to build gold savings regularly.
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Keep some Gold ETFs for quick trades and maintain a portion in Digital Gold for instant liquidity.
Before You Invest: Quick Tips
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Buy Digital Gold only from trusted sellers, apps, or banks.
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Keep your total gold allocation, including Digital Gold, to around 10–15% of your total portfolio.
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Know your goal — safety, extra income, or quick access and use Digital Gold smartly.
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Always read the fees, terms and conditions before buying Digital Gold or any gold product.
Final Thoughts
Gold continues to shine as a trusted store of value, but how you invest in it doesn’t have to be old-fashioned. With SGBs, Digital Gold, and ETFs, you now have modern ways to make gold a stronger part of your portfolio.
Stay informed, invest wisely, and let gold especially Digital Gold add strength and security to your wealth for years to come.
Want to explore more insights like this? Visit InCred Money for expert takes on markets, trends, and unlisted investment opportunities.
Source:
The Economic Times
