Gold ETF vs Physical Gold for Akshaya Tritiya 2026
| Feature | Gold ETF | Physical Gold |
|---|---|---|
| Demat account required | Yes | No |
| Expense ratio | 0.5–1% per year | 0 (but making + storage) |
| Min purchase | 1 unit (~₹60–100) | 0.5g coin |
| Liquidity | Instant (market hours) | 1–3 days at jeweler |
| GST | 0% | 3% |
| Capital gains tax | 20% LTCG with indexation (>3 yr) | Same |
| Physical delivery | Rare, only for large units | Default |
| Insurance | Implicit (fund holds 1:1 backing) | Home owner's risk |
Cost comparison over 5 years On ₹1,00,000:
- Gold ETF: 0.8% expense × 5 = ₹4,000 cost
- Physical 24K coin: 1.5% making + 3% GST = ₹4,500 upfront, 0% recurring
- Digital gold: 3% GST + 0.5% spread = ₹3,500 upfront, 0% recurring
For ≤5 year horizons, digital gold ≈ gold ETF ≈ physical coin. For 10+ year horizons, expense ratio compounds and ETF becomes expensive vs physical.
Akshaya Tritiya gap Buying a gold ETF on Akshaya Tritiya is culturally unusual. It is not wrong, but most families treat the day as a physical purchase occasion. ETF is better as a year-round allocation, not an Akshaya Tritiya ritual.
Verdict
- Akshaya Tritiya: Physical coin or digital gold
- Year-round investment: Gold ETF or SGB
- Never: both on the same ₹1 lakh purchase