A gold ETF (exchange-traded fund) holds physical gold of 99.5% purity in a vault and issues units that trade on the stock exchange. It is the simplest way to own gold without making charges, storage or purity worries. Here is how to buy one, step by step.
What You Need
- A demat and trading account with any SEBI-registered broker. The demat holds your units; the trading account lets you buy and sell on the NSE or BSE.
- Completed KYC: PAN, Aadhaar-linked address proof and a bank account.
- No minimum beyond one unit. Units are cheap: Nippon India ETF Gold BeES had an NAV of about ₹121 on 28 September 2026, and one unit is roughly 0.01 gram of gold.
If you don't have a demat account and don't want one, skip to the gold fund-of-funds option below.
Step 1: Choose a Gold ETF
All gold ETFs hold the same metal, so their returns are almost identical: the large ones returned about 29% over the year to 27 September 2026. Choose on three things:
| Fund | NSE symbol | Expense ratio | AUM (₹ Cr) |
|---|---|---|---|
| Nippon India ETF Gold BeES | GOLDBEES | 0.81% | 58,629 |
| ICICI Prudential Gold ETF | GOLDIETF | 0.49% | 28,325 |
| SBI Gold ETF | SETFGOLD | 0.65% | 27,085 |
| HDFC Gold ETF | HDFCGOLD | 0.59% | 24,417 |
| Kotak Gold ETF | GOLD1 | 0.52% | 14,989 |
The five largest by assets. AUM as of 31 August 2026; expense ratios checked 28–29 September 2026. All 14 gold ETFs above ₹1,000 crore are compared in our gold ETF guide.
- Expense ratio: the yearly fee. It ranges from 0.35% to 0.81% among the large gold ETFs, and it comes off your return every year.
- Liquidity: how much trades each day. Gold BeES traded about ₹300 crore a day between late August and late September 2026, about four times SBI Gold ETF's ₹70 crore. For small orders, any large gold ETF trades easily.
- Tracking: how closely the fund follows the gold price. The large funds trailed their benchmark by about 1–2 percentage points over the past year, including their fees.
For a closer look at the two most popular, see our Gold BeES review and SBI Gold ETF review.
Step 2: Place the Order
- Log in to your broker's app and search for the NSE symbol, for example GOLDBEES.
- Check the iNAV (indicative NAV), the fund's real-time fair value. SEBI requires fund houses to publish it, and NSE shows it on its ETF page. The market price should be close to it.
- Use a limit order at or near the iNAV rather than a market order, so you don't overpay if the price moves.
- Choose delivery (not intraday) so the units are held in your demat account.
- The units arrive in your demat account the next working day.
Step 3: Decide Between a Lump Sum and a SIP
ETFs don't offer automatic SIPs through the fund house. Two ways to invest regularly (the gold SIP calculator estimates the result after costs and tax):
- Broker SIP: many brokers let you schedule a monthly purchase of a fixed number of units or amount. Check the brokerage per order: a flat fee on every small monthly purchase adds up.
- Gold fund of funds (FoF): a mutual fund that invests in a gold ETF for you, with normal SIPs.
The No-Demat Route: Gold Fund of Funds
| Gold ETF | Gold FoF (Direct plan) | |
|---|---|---|
| Demat account | Needed | Not needed |
| SIP | Through some brokers | Yes, from ₹100 at some fund houses |
| Costs | ETF expense ratio, brokerage and spread | FoF fee plus the underlying ETF's fee (e.g. Nippon India Gold Savings Fund: 0.06% on top of Gold BeES's 0.81%) |
| Exit load | None | Often 1% if sold within 15 days |
| Long-term for tax after | 12 months | 24 months |
Over the year to 28 September 2026, Nippon India Gold Savings Fund (Direct) returned 28.42% against 29.06% for the Gold BeES ETF it holds. The FoF costs a little more but is simpler if you want automatic monthly investing.
What It Costs
- Expense ratio: charged daily inside the NAV, 0.35–0.81% a year for the large funds.
- Brokerage: many brokers charge nothing on delivery trades; some charge a flat fee per order.
- Bid-ask spread: small for heavily traded funds.
- Demat charges: a small depository charge when you sell.
- No GST on buying a gold ETF, unlike physical gold (3%).
How Gold ETFs Are Taxed
For units sold on or after 1 April 2025:
- Held more than 12 months: 12.5% on the gain, without indexation.
- Held 12 months or less: taxed at your income slab rate.
- Gold FoFs need more than 24 months for the 12.5% rate.
- The ₹1.25 lakh yearly exemption applies only to equity, not to gold.
Common Mistakes
- Buying with a market order in a thinly traded ETF and paying well above its value.
- Choosing on last year's return: all gold ETFs returned about the same; choose on cost and liquidity.
- Selling just before 12 months and paying slab-rate tax instead of 12.5%.
- Over-allocating after a rally: gold fell about 22% between late January and late March 2026. Decide your share of gold in advance.
Gold ETF or Sovereign Gold Bond?
No new Sovereign Gold Bonds have been issued since February 2024, so you can only buy existing ones on the exchange. From 1 April 2026, redemption at maturity is tax-free only for original subscribers, so exchange buyers are taxed. For most new gold investment, an ETF or FoF is now the practical choice. See physical gold vs SGB vs gold ETF.
More ETF guides are collected on our ETF hub.
This guide explains how to buy a gold ETF. It is not a recommendation to buy any specific fund.