This Article was fact checked and last updated for accuracy on April 5, 2025 by Mani Karthik
When I moved to San Francisco in 2018, I wanted to continue my family’s tradition of investing in gold. But the logistics seemed overwhelming.
How could I securely purchase, store, and manage gold investments in India while living 8,000 miles away?
After exploring various pathways and testing multiple platforms over the years, I’ve discovered that NRIs have more gold investment options in India than ever before. Each approach offers unique advantages and limitations that align differently with various investor needs.
Let me guide you through the practical realities of gold investment in India for non-resident Indians, based on both my personal journey and the experiences of dozens of fellow NRIs who’ve successfully built their gold portfolios from abroad.
Why Gold Remains a Strategic Investment for NRIs 📊
Before exploring specific investment vehicles, let’s understand why gold holds particular value for the NRI investor.
Gold provides natural protection against currency fluctuations between the rupee and dollar. This is something uniquely valuable to those of us with financial responsibilities in both countries.
During my first year abroad, the rupee depreciated nearly 12% against the dollar, but my gold investments helped offset this currency impact on my Indian assets.
Beyond financial considerations, gold investment maintains our connection to Indian traditions and family financial practices.
My grandfather started investing in gold in the 1960s, and continuing this practice from abroad helps me maintain that cultural and financial continuity.
Most importantly, gold has consistently proven its value during economic uncertainties.
During the 2020 pandemic market turbulence, my gold investments provided remarkable stability while both US and Indian equity markets experienced significant volatility. This reinforced gold’s role as a portfolio stabilizer during global uncertainty.
Digital Gold: The Modern NRI’s Convenient Entry Point 📱
Digital gold has revolutionized how NRIs can participate in gold investment without physical presence in India. These platforms represent ownership of 99.9% pure physical gold stored in secure vaults, purchased through entirely digital interfaces.
I began my NRI gold investment journey with monthly ₹5,000 automatic purchases through SafeGold. It was a perfect starting point that required minimal management while establishing my initial position.
The process was remarkably straightforward: I linked my NRE account, set up recurring transfers, and watched my gold position grow monthly without any further intervention.
What makes digital gold particularly attractive for NRIs is the complete elimination of physical presence requirements.
You can initiate purchases, track performance, and even sell portions of your holdings from anywhere in the world, at any time. This 24/7 accessibility aligns perfectly with the reality of managing investments across time zones.
The investment flexibility is equally valuable. You can start with amounts as small as ₹1 and accumulate systematically over time.
When my sister needed funds for her daughter’s education, I was able to sell exactly ₹75,000 worth of my digital gold holdings without disturbing the rest of my position.
This precision is impossible with traditional physical gold.
Top Digital Gold Platforms for NRIs
| Platform | Minimum Investment | Storage Fee | Buy-Sell Spread | NRI-Friendly Features |
|---|---|---|---|---|
| MMTC-PAMP | ₹1 | Built into spread | 3-4% | International payment options, physical delivery to India |
| SafeGold | ₹1 | Built into spread | 2-5% | User-friendly interface, jewelry conversion options |
| PhonePe Gold | ₹1 | Built into spread | 3-5% | Integration with NRI banking, simplified portfolio tracking |
However, digital gold isn’t without limitations. Redemption for physical delivery typically requires an Indian address, which often means involving family members. The regulatory framework is still evolving, as these platforms aren’t yet under SEBI’s direct supervision.
And while buy-sell spreads have improved, they typically range from 3-5%, creating a meaningful cost hurdle for short-term holdings.
MY TAKE: Digital gold is perfect for NRIs starting their gold investment journey or those wanting hassle-free accumulation without heavy paperwork. Just be aware of the slightly higher costs compared to ETFs, and know that getting physical gold might require family involvement in India.
Gold ETFs: The NRI Investor’s Efficient Market-Based Approach 📈
Gold Exchange Traded Funds offer NRIs a regulated, market-based approach to gold investment that addresses many limitations of digital gold while introducing different considerations.
I divided my ETF investments between Nippon and HDFC Gold ETFs to minimize single-provider risk while maintaining liquidity advantages of the largest funds.
This strategy has served me well, providing efficient exposure to gold price movements with the lowest ongoing costs among my various gold investments.
The market efficiency of ETFs creates tangible advantages. The transparent, exchange-based pricing typically results in tighter buy-sell spreads than digital gold platforms.
There are no making charges, wastage costs, or purity concerns that accompany physical gold purchases. For cost-conscious investors, these efficiencies can significantly impact long-term performance.
Perhaps most importantly for NRIs concerned about regulatory protection, gold ETFs fall under SEBI’s comprehensive regulatory framework.
This provides standardized investor protections, audited holdings with disclosure requirements, and established redemption procedures. It creates peace of mind that your investment exists within a well-regulated environment.
Top Gold ETFs for NRI Investors
| ETF | Expense Ratio | AUM (₹ Crores) | Tracking Error | Liquidity Rating | NRI Account Compatibility |
|---|---|---|---|---|---|
| Nippon India ETF Gold BeES | 0.64% | 6,300+ | Very Low | Excellent | Compatible with most NRI trading accounts |
| SBI Gold ETF | 0.50% | 2,500+ | Low | Very Good | Seamless with SBI NRI banking |
| HDFC Gold ETF | 0.59% | 2,300+ | Low | Very Good | Easy integration with HDFC NRI services |
This regulatory structure also creates cleaner integration with your broader investment portfolio.
My gold ETF holdings appear alongside my other Indian investments in consolidated statements, simplifying performance tracking and tax reporting across my global portfolio.
The trade-offs include more extensive account requirements. You’ll need a demat and trading account, and NRIs require a Portfolio Investment Scheme (PIS) account in most cases.
The documentation and KYC requirements are more extensive than digital gold platforms, often requiring Indian address proof and periodic compliance updates.
There are also practical limitations around minimum investments (typically ₹5,000-10,000) and trading windows limited to exchange hours. These considerations may impact accessibility for some investors.
MY TAKE: If you’re already investing in Indian stocks and have a demat account, Gold ETFs are a no-brainer for their lower costs and better regulation. The slightly higher entry barrier is worth it for serious gold investors looking for efficiency. I’ve saved approximately 2.5% annually using ETFs versus digital gold on comparable investments.
Gold Mutual Funds: The Simplified Professional Management Option 📊
Gold mutual funds represent a middle-ground option that sacrifices some cost efficiency for greater convenience, particularly for less market-savvy investors.
For my parents and older family members less comfortable with direct market investments, I set up systematic investment plans in Axis Gold Fund.
This allows them to accumulate gold exposure with minimal management requirements while still maintaining the regulatory protections of the mutual fund framework.
The simplified investment process eliminates the need for demat or trading accounts, allowing direct investment through fund houses with streamlined KYC processes.
The practical minimum investments are often lower than ETFs, and most importantly for many NRIs, the systematic investment plan options allow for disciplined accumulation without ongoing management attention.
Comparing Fund Performance and Features
| Fund | 3-Yr Return | Expense Ratio | Minimum SIP | NRI-Friendly Features |
|---|---|---|---|---|
| SBI Gold Fund | 14.2% | 0.82% | ₹500 | Strong documentation support, global banking integration |
| Kotak Gold Fund | 13.8% | 0.85% | ₹1,000 | International remittance-friendly, multiple currency options |
| Axis Gold Fund | 14.5% | 0.78% | ₹500 | Simplified KYC for NRIs, strong digital platform |
This convenience comes at a cost, however. The expense ratios are higher than direct ETFs, essentially creating two layers of management fees.
There’s potentially greater tracking error to actual gold prices due to cash holdings within the fund and timing differences in underlying investments.
For cost-sensitive investors with market comfort, ETFs typically represent better long-term value.
MY TAKE: I recommend gold mutual funds primarily for NRI family members who want “set and forget” gold investments. My analysis shows they typically cost about 0.25-0.35% more annually than ETFs, but the convenience factor is worth it for those who don’t want to deal with demat accounts or trading platforms.
Sovereign Gold Bonds: The Government-Backed Income Generator 🏛️
Sovereign Gold Bonds (SGBs) offer a unique value proposition by combining gold price exposure with fixed income. They’re the only gold investment that generates ongoing yield.
I allocate approximately 25% of my gold portfolio to SGBs specifically for the interest component, creating income from an otherwise non-yielding asset class. The 2.5% annual interest payment provides a meaningful enhancement to the overall return profile compared to other gold investments.
The tax advantages further improve the value proposition.
Capital gains are tax-exempt if held to maturity, interest typically faces lower effective tax rates for many NRIs due to DTAA provisions, and there’s no GST applicable (unlike physical gold purchases).
This favorable tax treatment significantly impacts after-tax returns over the eight-year bond term.
Sovereign Gold Bond Performance Comparison
| Investment Option | 8-Year Return Components | Effective Annual Yield | Tax Benefits | Liquidity Rating |
|---|---|---|---|---|
| Sovereign Gold Bonds | Gold Price + 2.5% Interest | ~3-5% above gold price movement | Capital gains tax exemption at maturity | Poor (before 5 years) |
| Gold ETFs | Gold Price – Expenses | ~0.5% below gold price movement | Standard LTCG with indexation | Excellent |
| Physical Gold | Gold Price – Making Charges | ~1-2% below gold price movement | Standard LTCG with indexation | Good (with price impact) |
The government backing eliminates counterparty risk concerns that might exist with private platforms.
There’s no storage or security concerns, redemption is guaranteed by the RBI, and you have protection against default scenarios that could theoretically impact private gold investment vehicles.
These benefits come with meaningful limitations, however.
The liquidity constraints are significant. SGBs have limited secondary market trading, early exit is only available from the fifth year onwards, and even then only on specific interest payment dates.
For investors who might need access to their gold investment value before maturity, this limited liquidity represents a serious consideration.
Access itself is restricted to specific issuance windows that may not align with your investment timing.
There are maximum investment limits per fiscal year, and importantly for many NRIs, US persons are generally excluded from eligibility due to regulatory restrictions.
MY TAKE: SGBs are absolute gold (pun intended!) for patient investors planning to hold for the full 8 years. The interest component alone has added ₹1.25 lakhs in additional returns on my ₹10 lakh SGB investment over four years compared to equivalent ETF holdings. Just make sure you’re comfortable with the liquidity limitations.
Physical Gold: The Traditional Approach with Modern Challenges 🏆
Despite the growth of digital and paper gold options, many NRIs still prioritize tangible gold ownership for both financial and cultural reasons.
For ceremonial and traditional purposes, I work with a trusted family jeweler in Mumbai who maintains our family accounts, allowing purchase during visits or via family members with secure storage options.
When my niece’s wedding approached last year, we were able to convert some of this physical gold into custom jewelry that honored our family traditions. This is something impossible with paper or digital gold investments.
The tangible ownership eliminates counterparty risk entirely. There’s no dependence on financial institutions, platforms, or government policy changes.
The direct physical possession creates immediate liquidity through India’s extensive jeweler network and allows use for traditional or ceremonial purposes that remain important to many families.
Cost Comparison: Physical Gold vs. Alternative Investments
| Cost Component | Physical Gold | Digital Gold | Gold ETF | SGB |
|---|---|---|---|---|
| Making Charges | 8-15% | None | None | None |
| GST | 3% | Built into spread | None | None |
| Annual Storage | Variable | Built into spread | 0.5-0.7% expense ratio | None |
| Buy-Sell Spread | 5-10% | 3-5% | 0.5-2% | Variable (secondary market) |
| Total Ownership Cost | 16-28% | 3-5% | 0.5-2% | Negative (due to interest) |
Physical gold also offers unique flexibility. It can be converted to jewelry when desired, used as loan collateral in India (against which banks will typically lend up to 75% of value), and easily gifted within families for important occasions.
This versatility maintains its appeal despite the growth of more modern investment vehicles.
The challenges for NRIs, however, are substantial. Storage security concerns are significant without personal presence in India. Insurance costs, authentication verification, and physical presence requirements for transactions create practical complications that digital alternatives eliminate.
Most NRIs find they must rely heavily on trusted family members to manage physical gold effectively.
The cost inefficiencies are equally important to consider. Making charges typically range from 8-15%, GST adds another 3%, and potential dealer premiums all impact investment performance.
For pure investment purposes (rather than ceremonial/traditional needs), these costs are difficult to justify compared to modern alternatives.
MY TAKE: I limit physical gold to only what’s needed for cultural purposes. The emotional value is undeniable, but from a pure investment perspective, the costs simply don’t make sense. For my cousin’s wedding, we specifically allocated 100 grams for jewelry creation while keeping the bulk of our gold investments in more efficient vehicles.
My Personal NRI Gold Strategy: Practical Insights from Experience 🧳
My journey with Indian gold investments has evolved through several phases, providing practical insights that might help other NRIs navigate their own gold investment decisions.
I started cautiously with small monthly digital gold purchases, testing different platforms while learning the regulatory and tax landscape applicable to my situation.
This low-commitment approach allowed me to establish a baseline position while determining my comfort level with various options. For most NRIs, this measured entry provides valuable education without significant financial commitment.
As my understanding grew, I moved into diversification and efficiency improvements. I added Gold ETFs for their cost efficiency and gradually incorporated Sovereign Gold Bonds during issuance periods.
This diversified approach allowed me to maintain the convenience of digital gold for small, ongoing purchases while improving the overall cost efficiency of my growing portfolio.
My Current Gold Allocation Strategy
| Investment Vehicle | Allocation | Primary Purpose | Management Approach |
|---|---|---|---|
| Sovereign Gold Bonds | 40% | Long-term holding with income | Purchase during issuance windows, hold to maturity |
| Gold ETFs | 35% | Cost-efficient market exposure | Quarterly rebalancing, use for tactical adjustments |
| Digital Gold | 15% | Convenience, small purchases | Automated monthly purchases, emergency liquidity |
| Physical Gold | 10% | Traditional/ceremonial needs | Family-managed, purchased during India visits |
Today, my approach balances multiple considerations. Sovereign Gold Bonds provide the income component, Gold ETFs deliver market efficiency and liquidity, digital gold offers convenience for small purchases, and I maintain minimal physical gold solely for traditional purposes.
This balanced strategy has proven effective through various market conditions while remaining manageable from abroad with minimal involvement from family members in India.
The key insight from my experience is that most NRIs benefit from a hybrid approach rather than selecting a single vehicle.
Different gold investment options solve different problems, and the optimal strategy typically involves strategic allocation across multiple vehicles based on your specific needs, time horizon, and management preferences.
FINAL THOUGHT: Don’t overthink this decision too much. Start with whatever method feels most comfortable, even if it’s not the most cost-efficient. You can always optimize later as you learn. The most important step is simply to begin building your gold position as part of your cross-border financial strategy.
What specific gold investment questions do you have? Your particular situation – country of residence, investment horizon, and financial goals – would help me provide even more tailored guidance for your gold investment journey!
Sources and References 📚
- World Gold Council – Investment Statistics
- Reserve Bank of India – Sovereign Gold Bond Information
- Securities and Exchange Board of India – Gold ETF Regulations
- MMTC-PAMP Digital Gold
- SafeGold Digital Gold Platform
- Income Tax Department of India – Capital Gains Guide
- Association of Mutual Funds in India – Gold Fund Data
- Indian Bullion Jewellers Association – Physical Gold Standards
- National Stock Exchange – Gold ETF Trading Information
- Bureau of Indian Standards – Gold Purity Certification