Best Gold Mutual Funds to Buy in India 2025

India’s deep-rooted affinity for gold spans centuries, making it a trusted store of value for millions. Beyond tradition, gold remains a highly attractive investment asset. 

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During economic uncertainties, it provides stability and protection against inflation. Gold mutual funds provide an easy and cost-effective way for investors to tap into gold’s potential without the hassle of purchasing and storing physical gold. 

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Best Gold Mutual Funds 2025

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Benefits of Investing in Gold Mutual Funds

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Check out the benefits of investing in gold mutual funds in India: 

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1. Convenient

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Gold mutual fund investments offer the ease and convenience of trading online. There’s no hassle of physical storage, making gold investment safe and secure. 

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2. Portfolio Diversification

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Investors can diversify their investment portfolios by investing in gold mutual funds. Gold investments help with market volatility and portfolio risks. It acts as a hedge against inflation and balances investment risk.

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3. Liquidity

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Gold mutual funds offer high liquidity, which means you can buy or sell your units on business days. 

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Unlike physical gold, you don’t need to find a buyer or worry about incurring resale losses. You can easily turn your investments into cash without any delay or hassle.

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4. Affordability

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Investing in gold mutual funds is affordable for investors who wish to start their investment journey with small amounts. 

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Investors can start investing in a gold mutual fund through a Systematic Investment Plan (SIP). Most SIP plans for gold mutual funds start at ₹100. 

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The barrier to entry is comparatively much lower than purchasing physical gold, and it also reduces the load of large lump sum investments.

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5. Tax Benefits

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Gold mutual funds held for over 3 years are classified as long-term capital gains (LTCG), which are subject to indexation benefits. Hence, your gold mutual fund LTCG will reduce your tax burden.

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On the other hand, if you hold your gold mutual fund for less than 3 years, it will be classified as short-term capital gains (STCG). STCGs in India are taxed according to an individual’s tax slab. 

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Learn how digital gold investments are taxed in India.

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6. Low Storage Fee

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Gold mutual funds and exchange-traded funds (ETFs) are held in secure vaults. Investors are not required to bear the storage cost, which is often associated with physical gold. 

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These physical storage costs can be substantial for individual investors who wish to start with small investment amounts. Hence, gold mutual funds are a cost-effective investment option. 

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Bottom Line

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Gold mutual funds are a smart investment choice because they combine the timeless value of gold with the ease and flexibility of mutual funds.

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They offer convenience, affordability, high liquidity, and portfolio diversification while eliminating the hassles and costs of physical gold storage.

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With attractive tax benefits and professional management, gold mutual funds provide a balanced and efficient way to secure your wealth against inflation and market volatility.