Dhanteras 2025: Don’t Just Buy Physical Gold! Explore Digital Gold, ETFs, Mutual Funds & Sovereign Gold Bonds for Smarter Investing

By Siddhi Jain | Oct 12, 2025, 14:27 IST

Every year, Dhanteras marks the beginning of the Diwali festivities across India — a day celebrated as a symbol of wealth, prosperity, and good fortune. Traditionally, people purchase gold ornaments or coins as an auspicious ritual to welcome Goddess Lakshmi and Lord Dhanvantari into their homes. However, the meaning of “buying gold” has evolved with time.

Today, investors have a range of modern and more convenient options beyond physical gold — including Digital Gold, Gold ETFs, Gold Mutual Funds, and Sovereign Gold Bonds (SGBs). Each of these offers unique advantages in terms of safety, liquidity, and returns. Let’s explore these options and find out which form of gold investment might be the most rewarding this Dhanteras.

1. Physical Gold – The Traditional Route

Buying physical gold remains the most conventional way of investing. People usually purchase jewelry, coins, or gold bars. However, while it’s tangible and emotionally satisfying, it comes with a few drawbacks:

Additional Costs: Buyers must pay GST and making charges, which can increase the overall cost.
Storage & Security: Physical gold needs safe storage and carries a risk of theft.
Taxation: If sold within 3 years, the profit is taxed under Short-Term Capital Gains (STCG) as per your income tax slab. After 3 years, it is subject to Long-Term Capital Gains (LTCG) tax at 12.5%.

Verdict: Ideal for traditional buyers and those seeking sentimental value, but less efficient as a long-term investment.

2. Digital Gold – Easy and Accessible

Digital Gold allows you to buy small quantities of gold online through platforms like PhonePe, Google Pay, or Paytm. You can invest with as little as ₹10 and own digital gold that is backed by physical gold stored in secure vaults by the provider.

However, there’s a key caveat — digital gold is not regulated by the RBI or SEBI, so investors should choose reliable platforms only.

Taxation: Similar to physical gold — STCG applies if sold within 3 years, and LTCG at 12.5% beyond that.
Liquidity: Can be bought or sold instantly, making it convenient for small investors.

Verdict: Great for beginners and those looking for flexibility, but less secure due to lack of regulation.

3. Gold ETFs – Smart and Safe Market Investment

Gold Exchange-Traded Funds (ETFs) invest directly in physical gold but are traded on stock exchanges just like shares. Investors can buy or sell units easily through their demat accounts.

Benefits of Gold ETFs:

High liquidity and no storage concerns.
Reflects real-time gold prices.
Ideal for investors comfortable with market-based investments.

Tax Rules: Selling before 12 months attracts STCG as per your tax slab, while selling after 12 months incurs LTCG at 12.5%.

Verdict: Suitable for those who want a transparent, market-linked gold investment without holding the metal physically.

4. Gold Mutual Funds – For New Age Investors

Gold Mutual Funds invest in units of Gold ETFs, offering indirect exposure to gold without the need for a demat account. Investors can choose between lump sum or SIP (Systematic Investment Plan) modes.

These funds are especially attractive for new investors who want to gradually build gold exposure. They are easy to manage and professionally handled by fund managers.

Taxation: The same as ETFs — STCG for holdings under 12 months and LTCG at 12.5% thereafter.

Verdict: Ideal for those who prefer expert management and flexible investment plans.

5. Sovereign Gold Bonds (SGBs) – The Government-Backed Option

Issued by the Reserve Bank of India (RBI), Sovereign Gold Bonds are one of the most secure and rewarding gold investment options. Each bond represents gold of 999 purity, and investors earn an annual interest of 2.5% in addition to the potential appreciation in gold prices.

Tenure: 8 years, with an early redemption option after 5 years.
Tax Benefits: LTCG is exempt if the bond is held till maturity.
Current Status: New SGB issues are closed, but investors can buy them through the secondary market.

Verdict: Best for long-term investors looking for safety, fixed income, and inflation protection.

Which Gold Investment Is Best for You This Dhanteras?

Investment Type	Regulation	Risk Level	Liquidity	Ideal For
Physical Gold	Regulated (Jewellers)	Medium	Moderate	Traditional buyers
Digital Gold	Unregulated	Moderate	High	Small, new investors
Gold ETF	SEBI Regulated	Low	High	Market-savvy investors
Gold Mutual Fund	SEBI Regulated	Low	High	Beginners
Sovereign Gold Bond	RBI Regulated	Very Low	Moderate	Long-term investors

Final Thoughts

Gold will always remain a symbol of prosperity and security in India, but how you buy it now matters more than ever. This Dhanteras 2025, instead of only purchasing jewelry, explore smarter, tech-driven, and tax-efficient gold investment options.

Whether it’s the stability of SGBs, the convenience of digital gold, or the liquidity of ETFs and mutual funds, diversifying your gold portfolio can bring both blessings and better returns in the years ahead.