Indians love gold, but in 2025 you don’t have to stick to jewellery. With Sovereign Gold Bonds (SGBs), Gold ETFs, and physical gold, the options differ in cost, returns, and liquidity. Here’s a clear guide to decide which suits your portfolio best.
India Snapshot
- SGBs:
- Issued by RBI; tenor 8 years (exit after 5).
- 2.5% annual interest credited semi-annually.
- No capital gains tax if held to maturity.
- Buy via banks, brokers, apps like Zerodha/Groww.
- Gold ETFs:
- Traded like stocks on NSE/BSE.
- 1 unit = 1 gram gold equivalent.
- Expense ratio ~0.5%–1%.
- Buy/sell anytime via demat.
- Physical Gold:
- Coins/jewellery with ~3% GST + making charges.
- Risk of theft/purity concerns.
- Easy for gifting/cultural use.
Invest in gold smartly in 2025:
Buy SGBs on Zerodha | Trade Gold ETFs on Groww
Comparison Table
| Feature | Sovereign Gold Bonds (SGBs) | Gold ETFs | Physical Gold |
|---|---|---|---|
| Returns | 2.5% interest + price gain | Only price gain | Only price gain |
| Liquidity | Lock-in 5 yrs (8 yrs maturity) | High, buy/sell anytime | Medium, resale at jeweller |
| Costs | No making charges, no GST | Expense ratio (0.5–1%) | GST + making charges |
| Tax Benefits | No capital gains at maturity | Capital gains tax applies | Taxable |
| Best For | Long-term investors | Traders + flexible buyers | Jewellery/gifting |
Pros and Cons
SGBs
Extra 2.5% annual interest
Safe, RBI-backed
Tax-free at maturity
Lock-in of 5 years
Gold ETFs
Liquid, trade anytime
Low entry cost (1 gram)
Pure, demat-based
No interest income
Physical Gold
Tangible asset
Culturally valuable for weddings/gifting
GST, making charges, storage risks
Smart Strategy for 2025
- Use SGBs for long-term core gold holding (5–8 years).
- Add Gold ETFs for short-term liquidity and trading.
- Keep physical gold only for jewellery and cultural purposes.
- Avoid over-allocation—keep gold at 10–15% of your portfolio.
Compare and invest in gold smartly today:
Buy SGBs | Invest in Gold ETFs
In 2025, gold remains a must-have hedge for Indian investors. SGBs offer the best long-term value with interest + tax perks, ETFs are ideal for traders needing liquidity, and physical gold still holds its traditional role. The smart portfolio uses a mix—SGBs for stability, ETFs for flexibility, and minimal physical gold for personal use.
