Gold BeES vs Gold ETFs: Expert Comparison to Invest in Gold

In India, gold is not just a metal but a symbol of wealth, prosperity and status. Its significance has made it a preferred investment for generations. But in today’s digital age, investors often wonder how to choose the right gold investment. Well, the two best options are Gold BeES and Gold ETFs. Both options provide you with great taxation benefits, convenient trading and safety measures.

But, with Gold BeES providing high liquidity and Gold ETFs providing cost-effectiveness, the confusion is, "Which is better to invest in India, Gold BeES or Gold ETFs?"

This guide covers everything you need to know about these options, from their features, benefits and costs to liquidity, taxation and who should invest in each. It also compares Gold BeES vs. Gold ETFs and lists the best gold ETF India 2025. So, let us explore which gold investment aligns with your financial goals.

What are Gold BeES?

Gold BeES stands for Gold Benchmark Exchange Traded Schemes, which are open-ended ETFs (Exchange Traded Funds) used to track the domestic price of the physical gold. These ETFs are listed on stock exchanges in India. Each unit of Gold BeES represents 0.01 gram of 99.5% pure physical gold.

The Gold BeES is one of India's oldest & most traded Gold ETFs, managed by Nippon India Mutual Fund. It is highly liquid and cost-efficient and can be purchased or sold through a demat account during market timing on the NSE and BSE.

Gold BeES Benefits:

• Allow digital and stress-free investments in gold with a demat account.
• Can be easily bought or sold on stock exchanges during market hours.
• Do not include additional charges like making and storage fees.
• You can purchase it in small portions (01g of gold per unit).
• Helps you diversify your portfolio & provides a hedge against inflation.

How to Invest in Gold BeES?

Here is the simplified process of investing in Gold BeES:

• Step 1: Open a demat & trading account and link it with your bank account.
• Step 2: Search for Gold BeES.

The best fund in India is Nippon India ETF Gold BeES (GOLDBEES):

Factors	Value
Expense Ratio	0.80%
AUM	Rs 22,355 Crore
5-year CAGR	13.53% to 15.0%
Liquidity	High Liquidity
Fund Manager	Vikram Dhawan
NAV	Rs 90.59
ETF Symbol	GOLDBEES

• Step 3: Place your order by entering the number of units you want to buy.
• Step 4: You will get a confirmation that the Gold BeES units are credited to your Demat account.

Pro Tip: Use a SIP Calculator to estimate the future value of your SIP investments.

What are Gold ETFs?

Gold Exchange Traded Funds (ETFs) are MF schemes that invest in physical gold and mirror its domestic price. Each unit of an ETF represents 1 gram of gold with 99.5% purity. Gold ETFs are listed & traded on the stock exchanges, the NSE and the BSE, and they also display the best Gold ETF India 2025 NAV pricing.

You can hold Gold ETF units in an electronic demat account, avoiding the need to store gold physically. This method combines the flexibility of stock trading with the convenience of gold investments, providing cost transparency, high liquidity & lower costs.

Gold ETFs Benefits:

• Provides a way to invest in gold without stressing over holding it.
• It can be easily purchased and sold on stock exchanges.
• Do not include additional costs like making charges and storage fees.
• Support portfolio diversification and acts as a hedge against inflation and market volatility. 

How to Invest in Gold ETFs?

Given below is the method of investing in Gold ETFs:

• Step 1: Make a demat and trading account with a registered stockbroker.
• Step 2: Select a suitable Gold ETF. The Best Gold ETFs in India are:

Gold ETF	5-Year CAGR (%)	Market Cap
ICICI Prudential Gold ETF	14.59%	Rs 1,905.05 Cr
HDFC Gold ETF	14.38%	Rs 1,906.09 Cr
SBI Gold ETF	13.54%	Rs 2,644.09 Cr
Kotak Gold ETF	14.5%	Rs 1,984.14 Cr
Nippon India ETF Gold BeES	13.53%	Rs 5,168.88 Cr

• Step 3: Place an order to buy units on the exchange.
• Step 4: After order confirmation, the units of Gold ETF will be credited to your demat account.

Let us look at the main comparison between the two gold investments.

Must Read: How Much GST on Gold is Charged in India? 2025 Update

What is the Difference Between Gold BeES and Gold ETFs?

Described below are the key differences between Gold BeES vs Gold ETFs:

Factor	Gold BeES	Gold ETFs
Expense Ratio & Costs	Around 0.80%, slightly higher	Range from 0.32% to 0.78%, generally lower
Liquidity	Very high liquidity, widely traded	Liquidity varies; top ETFs offer high liquidity
Taxation	Short-term capital gains (STCG) as per the income slab; Long-term capital gains (LTCG) at 12.5% without indexation	The same taxation rules apply
Performance & Returns	Strong track record, closely tracks the gold price	Comparable returns depending on fund and AMC
Risks	Market volatility and tracking error risks	Same risks as Gold BeES
Trading Method	Traded on NSE/BSE via Demat account like stocks	Traded similarly on stock exchanges

Let us look at the detailed version of the above comparison between Gold BeES and Gold ETFs.

Gold BeES vs Gold ETFs 2025: Based on Different Factors

Here is the detailed comparison of the Gold BeES and Gold ETFs depending on various factors:

1. Expense Ratio and Costs

Gold ETFs are better choices for investors with a long-term perspective because of their lower expense ratios (0.32%–0.78%) than Gold BeES (around 0.80%). However, investors prioritizing easy trading can consider Gold BeES as they offer higher liquidity and an established track record.

2. Liquidity

For investors wanting higher liquidity with minimal cost impact, Gold BeES is the best choice. It is one of the most actively traded gold ETFs on Indian stock exchanges. With its huge investor base and trading volumes, it allows easy buying and selling of units, providing seamless transaction capability.

3. Taxation System

Under Indian law, Gold BeES and Gold ETF taxation rates are identical and provide equal benefits and liabilities for investors. A 20% tax rate on Long-Term Capital Gains (LTCG) held for over 3 years and Short-Term Capital Gains (STCG) held for less than 3 years are taxed as per individual income tax slabs.

4. Performance and Returns

Gold ETFs and Gold BeES returns closely track domestic gold prices, displaying stable and reliable performance. Because of their established track record, Gold BeES are preferred for investors looking for consistency, while cost-sensitive investors might consider other well-performing Gold ETFs.

5. Associated Risks

The risk factors for Gold investments are tracking error, liquidity risk, counterparty risk and market risk. Gold BeES, with its high trading volumes, has an advantage over Gold ETFs in liquidity risk. Both have minimal tracking errors and share similar counterparty risks, as both hold physical gold in a secure place. However, Gold BeES is slightly better due to lower liquidity risk.

6. Trading Method

Gold BeES and Gold ETFs have the same trading method. You can trade on the NSE & BSE using your Demat and trading accounts. Both allow easy buying and selling and you can do it during market hours, just like stocks. This makes investing in them as easy as investing in equity.

Let us know which investment option you should choose for your gold investment.

Also Read: Gold Mutual Funds vs. Gold ETF Which One is Best for You?

Which One Should You Choose: Gold BeES or Gold ETFs?

You can identify which option is better for you to invest in gold by the following description:

Choose Gold BeES if:

• You are good to go with high liquidity and seek easy transactions.
• You want a well-established and trusted Mutual Fund, like Nippon India Mutual Fund.
• You prefer consistent performance.
• You are comfortable with a slightly higher expense ratio.

Choose Gold ETFs if:

• You want lower costs and an expense ratio.
• You want multiple funds or AMC options for investments.
• You are fine with potentially lower liquidity.
• You seek diversification within gold products.

Now, let us learn who the highly suitable investors are for investing in Gold ETFs and Gold BeES.

Who Should Invest in Gold ETFs and Gold BeES?

Gold investments are ideal for investors with different profiles and objectives, such as:

• Risk Averse Investors: Individuals who want low-risk investments.
• Investors Seeking Diversification: Those who want to diversify in equities.
• Long-Term Investors: Personals with a long-term investment perspective.
• Small-Scale Investors: Individuals with limited capital.
• Tax-Conscious Investors: Those who are seeking tax-saving options.
• Investors Seeking High Liquidity: Entities wanting easy buy-sell transactions.
• Investors Comfortable with Digital Investments: Those who want stress-free investments.
• Investors Sensitive to Costs: Individuals who want funds with lower expense ratios and other costs.

Let us explore the alternative options of gold investments besides Gold ETFs and Gold BeES.

Other Gold Investment Options in India

Mentioned below are the top gold investment options in India for 2025:

• Physical Gold: It is a traditional option, including jewelry, coins and bars. Popular for cultural and sentimental reasons.
• Sovereign Gold Bonds (SGBs) : Govt-backed bonds with fixed interest (~2.5% p.a.), tax benefits & gold price appreciation.
• Digital Gold: Small online investments through apps, backed by physical gold stored securely.
• Gold Mutual Funds: Funds investing in gold ETFs or other gold MFs, offering diversification & professional management.
• Gold Mining Stocks: Investing in companies that include gold mining and production.

Pro Tip: Use a Mutual Fund Screener to search, filter and compare mutual funds.

Conclusion

In short, Gold BeES is a reliable, highly liquid gold ETF with a long track record. However, it has a slightly higher price and expense ratio, while Gold ETFs offer lower expenses. Both have similar tax benefits & trading convenience.

Therefore, you can choose Gold BeES for reliability or Gold ETFs for cost-effectiveness & variety.

Related Blogs:

1. What will be the Expected Gold Rate in 2025 in India?
2. How to Calculate Tax On Mutual Fund Redemption?

FAQs

1. Which is better for investment: Gold BeES or Gold ETFs?
   

   Gold BeES is ideal for investors wanting liquidity. Gold ETFs suit those focused on minimizing expenses or seeking options from different AMCs.

2. What are the tax implications of investing in Gold BeES and Gold ETFs?
   

   Both follow the same tax rules: short term gains (under 36 months) are taxed according to income slabs and long term gains (above 36 months) are taxed at 20% with indexation benefits.

3. What are the risks involved in Gold BeES and Gold ETFs?
   

   Risks include market price volatility, minimal tracking error, liquidity risk (lower for Gold BeES) and counterparty risk.

4. Are there any charges besides the expense ratio for investing in Gold ETFs?
   

   Yes, investors may pay brokerage fees on buy/sell transactions like stock trading. Additionally, Demat account charges may apply.

5. Is there a minimum investment amount for Gold BeES and Gold ETFs?
   

   The minimum investment is one unit, which varies in value but often equals roughly 1 gram or less of gold.