Dhanteras, Diwali 2026 shopping guide: How do the costs of investing in gold ETFs differ from buying gold jewellery?

With Dhanteras and Diwali approaching, investors and buyers have two options to add gold to their portfolios: gold exchange-traded funds (ETFs) and physical gold in the form of jewellery or coins.

Gold ETFs can be bought in units for a few hundred or thousand rupees on stock exchanges and are traded like stocks. Physical gold jewellery and coins, meanwhile, can be purchased from jewellers.

However, the costs involved in buying and holding these two forms of gold differ significantly. Here is a breakdown of the expenses involved in each option.

Manish P. Hingar, Chartered Accountant, Founder and Chief Executive Officer, Fintoo, said gold ETF investors incur the following charges:

• Brokerage: Often zero to ₹20 per order.
• Stamp duty: 0.015%.
• NSE transaction charges: 0.00297%.
• SEBI and IPFT fees: 0.0001% each.
• GST: 18% on brokerage and these fees, not on the gold itself.
• STT: Not applicable to gold ETFs.
• DP charges: A small fee charged by the broker when selling and taking units out of the demat account.
• Expense ratio: Usually 0.2–0.8% annually. This is not billed separately but deducted from the NAV, resulting in slightly lower returns.

“This means investors do not have to pay the expense ratio separately. It is deducted from the fund's assets and reflected in the ETF's NAV,” he added.

Hingar said the cost of jewellery includes the following components:

• Gold value: Calculated according to the prevailing price and purity of the gold purchased.
• Making charges: Roughly 3–25% of the gold value or a fixed fee per gram.
• Hallmarking fee: A small fee per piece.
• GST: 3% on the gold value plus making charges.
• Additional charges: Stones and wastage charges can increase the final bill.

For example, ₹1 lakh worth of gold with 12% making charges would cost approximately ₹1,15,360, including ₹1,12,000 towards gold and making charges and ₹3,360 as GST.

Therefore, the final jewellery bill includes the gold value, making charges and applicable GST, while additional costs may arise if the jewellery contains stones or the jeweller levies wastage charges.

Gold ETFs are far cheaper. Hingar said, “On ₹1 lakh, buying usually costs under ₹50, plus about ₹200–800 a year in expense ratio. Jewellery with 12% making costs about ₹15,000 extra in making charges and GST, and most of that is lost when you resell.”

Illustrative calculation

“ETFs also save you the trouble of checking purity and storing the gold. If you want to wear it, buy jewellery. If you want to invest, choose an ETF,” he added.

Sheetal Goel is a Content Producer at Livemint, where she covers corporate developments, personal finance, business trends, markets, and SEBI-related updates. She focuses on simplifying complex financial concepts and presenting them in a clear, reader-friendly manner, thereby helping audiences better understand investment trends, personal finance, and market developments. Her writing focuses on making finance more accessible to everyday readers while maintaining clarity, accuracy, and relevance. <br><br> She holds a degree in Economics (Hons.) along with an MBA in Finance, which has helped her develop a strong foundation in financial analysis, market understanding, and business reporting. Before joining journalism, she worked with finance and broking firms, where she closely followed market developments, investment strategies, and evolving industry trends. This practical exposure strengthened her understanding of financial markets. She has also written content across multiple formats and platforms, including YouTube, LinkedIn, and Instagram. <br><br> Over time, she has developed expertise in covering market-linked stories, investor-focused topics, and regulatory updates in a simplified yet informative style. She also enjoys reading and listening to Hindi poetry, reflecting her appreciation for literature and creative expression beyond the world of markets and numbers.

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