Every time you receive a salary credit message on your phone, you spend it on shopping, outings, Netflix subscriptions, and much more. But you also keep aside a small amount of money to invest in gold, stocks, or mutual funds to grow your wealth. One asset class that has been attracting significant attention lately is Gold.
There are different products to choose from, such as Gold ETFs, Electronic Gold Receipts, and Digital Gold. So, which one is best for you to park the surplus money every month? Let’s find out.
What are Gold ETFs?
Gold ETFs (Exchange Traded Funds) are a perfect and mutual funds. They are commodity-based mutual funds traded in the market like stocks. These funds follow a passive investing strategy and track the price of gold in the domestic market.
You can easily invest a small amount every month by buying the gold ETF units through your trading and demat account. These funds are the go-to options for salaried individuals to invest their surplus money without the hassle of storage, theft, and purity concerns that are associated with physical gold.
What are EGRs?
are exchange-based securities that allow you to convert the digital receipt to or from physical gold. Instead of keeping physical gold yourself, the gold is securely stored in SEBI-approved vaults, and your ownership is recorded digitally in a demat account. EGRs work like shares held in a demat account, making gold investment simple, secure, and easy to manage. This instrument bridges the gap between investment and personal use.
This product was recently launched by NSE in different denominations, starting at 100 mg, with purity levels of 999 and 995. These receipts follow a single pricing across the nation, are easily traded on the exchange.
What is Digital Gold?
Digital gold, as the name suggests, allows you to buy gold digitally through designated platforms like Paytm. It is a new-age investment mode to buy, sell, and hold 24K physical gold online without taking physical possession.
Their key benefits are convenience, allowing fractional ownership, and you can also later convert the digital balance into physical coins or bars if allowed by the platform.
Which One is Best for Salaried Employees?
| Investment Option | Key Features | Minimum Investment | Taxation | Demat Account Required | SEBI Regulated | Storage Charges |
| Gold ETF | High liquidity, no storage issues, SIP option, easy trading | Depends on 1 unit price (around ₹15 – ₹150) | Capital gains tax is applicable like mutual funds | Yes | Yes | Not Applicable |
| Electronic Gold Receipts (EGRs) | Standardised pricing, high purity, and physical conversion option | Starts from 100 mg | Capital gains tax applicable, GST when converting to physical gold | Yes | Yes | ₹15 per kilogram, per day |
| Digital Gold | Convenience, fractional investing, easy access, low entry amount | Starts from as low as ₹10 | Taxed like physical gold | No | No | Not Applicable |
A Gold ETF is regulated by the Securities and Exchange Board of India, trades on stock exchanges, and can be bought and sold through a demat account. Taxation is also simple: long-term capital gains are taxed after 12 months, making it ideal for most investors.
Buying EGRs on exchanges does not attract 3% GST, unlike direct physical gold purchases. However, investors still pay brokerage, demat, exchange, vaulting, and storage charges. If you later convert EGRs into physical gold, additional delivery charges and 3% GST apply at redemption. These extra costs can make EGRs less attractive for some investors. Besides, lower trading volumes can also trigger liquidity problems.
While buying Digital Gold is convenient on apps like PhonePe or Paytm, it is not formally regulated by SEBI or RBI. Investors also pay GST and often wider buy/sell spreads. Taxation is less attractive because the long-term status starts only after 24 months.
Disclaimer: This is purely for educational/ informational purposes and should not be taken as any sort of investment advice. Always consult a SEBI-registered advisor before making any investment decisions.