Akshaya Tritiya is almost here, and for many, it’s that time of the year when buying gold feels like a must. But here’s the twist—gold is no longer just about jewellery. With digital gold, ETFs and SGBs on the table, the real question is: which one should you pick this year?
The answer isn’t one-size-fits-all. It depends on how long you want to invest, how comfortable you are with markets, and what you expect from gold in your portfolio.
MORE THAN JUST GOLD: UNDERSTANDING YOUR OPTIONS
At first glance, all three—digital gold, ETFs and SGBs—seem similar because they are linked to gold prices. But the way they work is quite different.
Sarvjeet Singh Virk, CEO of jUMPP, explains, “From an industry perspective, all three options are linked to gold prices, but their risk-return profiles differ based on structure and purpose.”
He points out that while ETFs and SGBs are regulated and offer better transparency, digital gold stands out for its ease of access. “SGBs also provide a fixed annual interest, which enhances overall returns when held until maturity,” he adds.
JUST STARTING OUT? KEEP IT SIMPLE
If this is your first time investing in gold, the idea of choosing between these options can feel confusing.
Virk says the choice depends largely on your comfort level. “Digital gold offers ease of access and low entry barriers, making it a convenient starting point for small, experimental investments,” he says.
On the other hand, Gold ETFs suit those who already have a demat account and want liquidity. SGBs, with their lock-in period, are better for long-term investors who are willing to stay invested.
Gaurav Singh Parmar, Associate Director at Fincorpit Consulting, takes a slightly different view. “First-time investors should choose Gold ETFs because these financial instruments provide secure investment options together with accessible trading options,” he says, highlighting their balance of safety and flexibility.
LIQUIDITY VS PATIENCE: WHAT MATTERS MORE?
One of the biggest differences between these options is how easily you can exit.
Digital gold allows almost instant buying and selling within apps, making it highly convenient. ETFs can be traded on stock exchanges during market hours, offering strong liquidity.
SGBs, however, require patience.
“Gold ETFs provide high liquidity. SGBs experience low secondary market liquidity while their maximum advantages can only be attained through holding until maturity,” Parmar explains.
Virk sums it up neatly: ETFs offer market liquidity, digital gold gives everyday flexibility, while SGBs are designed for long-term holding.
COSTS, RETURNS AND WHAT YOU ACTUALLY EARN
Each option comes with its own cost structure, and that can impact your final returns.
Digital gold often includes hidden costs like storage and insurance. ETFs come with expense ratios and brokerage charges. SGBs, on the other hand, are relatively cost-efficient and even offer a fixed annual interest.
“SGBs are widely considered suitable for long-term wealth creation due to their dual return structure—capital appreciation linked to gold prices and a fixed annual interest component,” Virk says.
WHAT ABOUT TAXES?
Taxation is another factor that can quietly shape your returns. Digital gold and ETFs are taxed like physical gold. This means capital gains tax applies depending on how long you hold them.
SGBs stand out here.
Virk explains that capital gains from SGBs are tax-free if held till maturity, although the interest earned is taxable. This makes them particularly attractive for long-term investors.
IS THIS THE RIGHT TIME TO INVEST IN GOLD?
Gold prices have seen some ups and downs recently, leaving many investors unsure about timing.
Parag Shah, CEO of Kisna Diamond & Gold Jewellery, offers some perspective, “Gold has seen some correction after touching highs above 1,80,000 earlier this year, easing below 1,45,000 and now stabilising around 1,50,000. This kind of consolidation typically creates a more comfortable entry point rather than a speculative peak.”
He adds that gold has delivered positive returns over several years, reinforcing its role as a long-term store of value.
PHYSICAL VS DIGITAL: THE MINDSET SHIFT
Despite the rise of digital options, physical gold still holds strong emotional value in India.
“Physical gold continues to hold a strong preference, particularly in India, where it serves both emotional and financial purposes. While digital gold has lowered the entry barrier and brought in new, younger participants, it is often seen as a flexible starting point rather than a final destination,” Shah says.
What’s emerging instead is a mix—people accumulate through digital or financial gold and eventually convert it into physical assets.
MISTAKES TO AVOID THIS AKSHAYA TRITIYA
Experts warn that many investors make simple but costly mistakes when choosing gold investments.
“One common challenge is selecting an investment format based on convenience rather than suitability,” Virk says.
Shah adds that reacting to short-term price movements or investing without clarity on end-use can lead to poor decisions.
Parmar highlights the importance of aligning your choice with your needs—whether it’s liquidity, safety or long-term returns.
Simply put, there’s no single “best” way to invest in gold this Akshaya Tritiya. Digital gold is easy and flexible, ETFs offer liquidity and transparency, while SGBs reward patience with added returns and tax benefits.
The key is to match the option with your goal. Because in the end, it’s not just about buying gold on an auspicious day—it’s about making sure it fits into your larger financial plan.
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