From ETFs To SIPs : Comparing Silver Investment Options In India

KEY TAKEAWAYS

1. The blog covers various options for investment in silver, going beyond the traditional way of buying it in the physical form.

2. Silver ETFs in India have seen significant growth, outpacing gold ETFs in volume, and offer a way to invest in silver with high liquidity and tax implications based on investment duration.

3. Digital silver can be purchased through various platforms, stored securely in vaults, and is subject to taxation similar to digital gold, with long-term and short-term capital gains.

4. Silver SIPs allow for regular investments in digital silver, starting with low amounts, and offer flexibility to convert to physical silver or sell instantly.

5. A comparison between digital and physical silver highlights differences in ownership, investment minimums, liquidity, storage, security, accessibility, and purity.

6. Silver prices in India have risen significantly in 2025, with predictions suggesting further increases, although actual future prices remain uncertain.

We all know that gold grabs most of the headlines when it comes to precious metals, especially in recent months when it soared past the historic mark of Rs 1.3 lakh (per 10 grams of 24 karat gold). The precious yellow metal has a rich history, tradition and cultural value, besides of course being one of most favourite asset classes in investor’s portfolios.

But what about silver? A report after last month’s Akshay Tritiya had mentioned that silver ETFs (Exchange-Traded Funds) had outshined gold in volume. While Gold ETFs grew from Rs 130 crore to Rs 331 crore from 30 April 2024 to 30 April 2025 (2.5x growth), silver ETFs saw an even bigger jump, with volumes soaring from Rs 95 crore to Rs 313 crore in the same one year period (3.3x growth). Even during last year’s Dhanteras, a similar trend had shown up.

So how can you diversify your portfolio by investing in silver? Besides the traditional way of buying silver jewelry, there are various alternative investment options to invest in this precious metal. Let us dig deeper into some other ways to invest in silver, about which you may not know about.

Beyond The Physical Form: Silver Investment Options In India

1. Silver ETFs

Before we dig into the concept of silver ETFs, let us first understand what ETFs are. Exchange Traded Funds (ETFs) are funds that track indices like Sensex, Nifty, etc. So, when you buy units of an ETF, you are actually buying units of a portfolio that tracks the performance of such indices. ETFs track and reflect the performance of those indices.

ETFs trade like a common stock on the stock exchanges, and the price of the ETF changes in accordance with how the trading in the market is taking place. The trading value of an ETF would depend on the net asset value of the underlying assets that it represents.

Now, coming back to Silver ETFs. Silver ETFs provide exposure to silver by holding physical silver of 99.9% or higher purity. They must invest at least 95% of the total assets of their scheme in silver and silver related instruments.

Silver ETF schemes are managed passively, and they track the market price of silver, which is why the NAV (Net Asset Value) of the fund is subject to fluctuations based on the silver’s spot price. Also, once the ETF gets listed on the exchanges, you, as an investor can buy/sell units on the recognized stock exchange(s), thus offering a high degree of liquidity, right!

Moreover, the investment objective of silver ETFs is to generate returns that are in line with the performance of physical silver in domestic prices, subject to tracking error.

As far as taxation of Silver ETFs is concerned, here’s how its done:

• For investment period less than or equal to 1 year: Gains/profits are treated as short-term capital gains & taxed as per your tax slab

• For Investment period of more than 1 year (Before 1st April 2025): Gains/profits are treated as long-term capital gains and taxed as per your tax slab

• For Investment period of more than 1 year (Starting from 1st April 2025): Gains/profits are treated as long-term capital gains and taxed at 12.5%

Also, back in November 2021, a big move was taken by SEBI when it issued guidelines to regulate silver ETFs. You can check out this circular for more details.

https://www.sebi.gov.in/legal/circulars/nov-2021/norms-for-silver-exchange-traded-funds-silver-etfs-and-gold-exchange-traded-funds-gold-etfs-_54166.html

2. Digital Silver

Just like you can buy digital gold, you can buy digital silver as well. From Augmont, Digigold, MyDigiSilver, to MMTC-PAMP, there are various platforms through which you can buy digital silver. The digital silver you buy usually gets securely stored in safe vaults monitored by an independent trustee. For example, in the case of Digigold platform, the silver is stored in government trusted vaults of BRINKS, which provides secure logistics, cash management & security services.

When it comes to regulations, digital silver, just like digital gold, is not explicitly regulated by the RBI or SEBI. However, digital silver platforms often operate under industry guidelines and require custodians to be registered with SEBI. Also, some digital silver products, like silver ETFs, are regulated by SEBI. Further regulations and guidelines regarding digital gold and digital silver might be taken up by the regulators in near future.

As far as taxation is concerned, digital silver attracts the following taxation:

• LTCG of 20.8% (including indexation benefit), whereas STCG gets taxed as per your applicable tax slab.

• Here, long-term capital gains (LTCG) are levied if you sell the digital gold after 36 months, and if you sell it within 36 months, the profit is termed as STCG ( short-term capital gain).

3. Silver SIPs

It’s a no-brainer that SIPs are one of the most popular investment routes that have come into the picture for mutual funds investors. But beyond mutual funds, you even have the option to do SIPs in digital gold and digital silver. Few platforms such as Digigold and Ebullion (eBPL) are offering investors the option to start investing in digital silver from just Rs 100-500. The accumulated silver from these SIP investments can either be converted from digital to physical form or be sold instantly.

With the help of SIPs, you need not wait for the ‘right moment’ to invest in silver, and instead, you can regularly invest in it over the long term. This can be helpful for investors who cannot afford to buy large amounts of silver but still wish to invest in this asset class.

The taxation in this case of silver SIPs is similar to what we explained for digital silver, i.e. LTCG of 20.8% (including indexation benefit) and STCG taxed as per your applicable tax slab. Here, long-term capital gains (LTCG) are levied if you sell the digital gold after 36 months, and if you sell it within 36 months, the profit is termed as STCG ( short-term capital gain).

Comparing Digital Vs Physical Silver

Silver Rate Predictions For 2025

At present, silver’s price in India is over Rs 190 per gram (or Rs 1900 per 10 grams and Rs 1,90,000 per kg), varying city to city. The precious metal had started this year at a much lower rate of around Rs 90 per gram (or Rs 900 per 10 grams and Rs 90,000 per kg).

As far as the predictions are concerned, firstly let’s look at what the Economic Survey of 2024-25, which was tabled in the Parliament in January 31, 2025, had mentioned about silver.

The survey had mentioned that gold prices were expected to decrease while silver prices were expected to increase in 2025, as per the World Bank’s prediction.

In another prediction, Robert Kiyosaki, who is the famous author of ‘Rich Dad Poor Dad’, had made a bold prediction that silver would breach the Rs 200 per gram (i.e. Rs 2,000 per 10 gram) mark in 2025.

All that remains to be seen, who knows, silver’s prices may or may not touch the predicted levels in 2025! We have to wait and watch!

Please note that this is an opinion blog and not official research advice. This blog aims to promote informed decision-making and does not encourage or discourage you from investing in any asset class or platform.

Thank you for reading and hope to see you in the next one!