Gold Investment Comparator
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How it works
All gold is not equal. ₹1 lakh of jewellery starts life worth ~₹85,000 the moment you walk out — making charges (10–15%) and 3% GST are gone forever. A coin or bar keeps the full metal value. ETFs and funds track gold minus a small yearly expense. SGBs pay you 2.5% interest on top and go tax-free at 8-year maturity.
Over 5 years at 8% gold growth, the gap between jewellery and an ETF is roughly 15–18% of your capital — paid entirely in avoidable costs. Buy jewellery to wear; buy paper or coins to invest.
One caveat: this compares pre-tax values. Physical gold and ETF gains face 12.5% LTCG after 2 years; SGB maturity gains are exempt (for original allottees). The ranking rarely changes, but the exact gap shrinks slightly after tax.
Frequently asked questions
Is jewellery a bad investment?
As an investment, yes — making charges (10–15%) plus 3% GST mean you start 13–18% underwater. It is a consumption purchase that happens to hold value, not an investment.
Gold ETF vs gold mutual fund?
ETFs are cheaper (~0.5% expense vs ~1% for funds) but need a demat account. Funds allow SIPs from ₹100. For lump sums, ETFs win; for monthly investing, funds are simpler.
Are SGBs still worth it?
Held to the 8-year maturity: yes — 2.5% yearly interest plus tax-free gains is unmatched. But no new tranches have been issued recently, and secondary-market purchases from April 2026 lost the tax-free maturity perk.
What are making charges typically?
10–15% for plain gold jewellery, 20–30%+ for intricate designs. They are pure labour cost — a buyer pays only for metal weight (minus melting loss) on resale.
How is gold taxed?
Physical gold, ETFs and funds: 12.5% LTCG after 24 months, slab rate if shorter. SGBs: tax-free at maturity for original subscribers; taxable otherwise.
Should I buy gold coins from banks or jewellers?
Compare per-gram premiums over the spot price — banks charge more but guarantee purity; reputed jewellers with BIS hallmark are usually cheaper. Avoid "schemes" bundling coins with jewellery purchases.
Does 3% GST apply to ETFs too?
No — GST applies to physical gold purchases (and making charges). ETFs and mutual funds have no GST; you pay only the expense ratio and brokerage.
Can I get a loan against gold ETF/SGB?
Against physical gold, easily (gold loans). Against ETFs/SGBs, some lenders offer loan against securities — rates and LTVs vary. Check before counting on it.
What allocation to gold makes sense?
5–10% of a portfolio as a diversifier and crisis hedge. More than that drags long-term returns — gold preserves wealth; equities build it.
Digital gold — good or bad?
Convenient but check the spread: many platforms charge 2–4% over spot plus GST, and regulatory protection is thinner than for ETFs. For serious amounts, ETFs are cleaner.