How to buy gold coins in India?

I have written about investing in gold through gold ETFs, and gold monthly income plans in the past, but there is a more direct way to invest in gold, and that is by buying gold coins. I use the word direct because you buy physical gold, and don’t have to pay fees to the middle-man, thereby eliminating at least one layer in between.

The flip – side is that you will have to store physical gold with you, but most of you would have bank lockers to store jewelery anyway.

Here are a few things you should know about buying gold coins in India:

1. Reputed banks sell gold coins: The most important thing to me is that reputed banks like SBI also sell gold coins, and that reduces the chances of fraud, and someone selling you something which is of less purity than they claim. A lot of banks have entered this space, and they sell gold coins through their branches. Not every branch will sell you gold coins, so you need to go to the bank’s website and find out the closest branch that will do so.

2. Different sizes: Gold coins are available in different sizes, so you can buy the ones that suits your needs the most. The usual sizes are coins of 2, 4, 5, 8, 10, 20 and 50 grams. The coins are 24 carats, and the banks guarantee their purity too.

3. PAN needed if you are buying gold coins worth more than Rs.50,000: If you plan to buy gold coins worth more than Rs.50,000 then the bank will ask you for your PAN details. I don’t think a jeweler will ask for similar documentation, and that might be one reason to go to a jeweler to buy a gold coin.

4. Banks won’t buy – back your gold coin: I have not seen any banks that you can sell your gold coins to. They are happy to sell you their gold coins, but you can’t go to them and sell it back to them. You will have to sell the gold coins to the jeweler, and this is probably another reason for buying gold coins from jewelers in the first place.

5. You might pay a premium for buying gold from a bank: Now, I started off extolling the virtues of buying gold coins from reputed banks, and I will end this post by mentioning that if you compare prices between your local jeweler and some banks – you might find a difference. There will be a difference even when they guarantee the same purity. A lot of people think that this premium is worth it because the price is higher when you go to sell the gold, but that is not always true. You don’t get this premium while selling off your gold coin. In effect, buying gold coins from your jeweler might turn out to be cheaper than buying it from a bank. It is up to you to decide whether the difference in price is worth it to you or not.

These were just some points that you should keep in mind while buying gold coins – I am going to write more about this topic in the future because a lot of people are interested in this, and would love to hear if any of you have had any experience with buying gold coins.

151 thoughts on “How to buy gold coins in India?”

  1. Well you got interesting write up on the gold coins, though I would personally always suggest for Gold ETF if one seeks an investment.

    But it is also to note that very few people know that if one invests in gold as an SIP (by doing monthly investment), we can see that gold has given 19% returns CAGR from 2001 to 2010. In similar time frame the sensex has also given 19% CAGR.

    For more you can check: why invest in gold

      1. Well in that time frame it has given a modest returns around 9-10% … but at the same time one must have invest via SIP to get those kinda returns.. the gold hasnt enjoyed great growth post oil shock of 1980. Its performance has added only in last 10 -12 years.. considering the same gold can always be as an good asset class diversification in the range of 5-10% in portfolio.

  2. i have seen a number on bank of baroda 10 gm gold bar, i would like to know what is that no.?? is it something like unique code containing detail about gold and does very bank have this code or is it good to but with a code on it?

  3. today i bought a 10grm gold coin 99.50 purity of NIBR from local jeweller shop in thane. after inquiring a little detail from various shops, i found that coins are being sold with calculation of 99.50 gold rate in market + 2% vat + additional charge termed as coining charge, various from jeweller to jeweller.

    in my case i was charged 80 Rs. per gram (this is the lowest i found after inquiring 4-5 jewellers). along with the deal jeweller told me that i can exchange this coin with any jeweller, when buying jewellery.

    i have few question still to be answered
    1. was the deal i had, is a fair deal?
    2. when i will exchange this gold coin with jewellery, i am not suppose to pay any vat on that jewellery equivalent to coin wt. am i right or wrong at this point?
    3. how the exchange deal will happen if jewellery i select in exchange is of less purity let say, 958 or 917, whereas my coin is 995.

    Thanks in advance

  4. Dear Sir,
    Iwent to enquire about the rate of hallmarked gold jewellery from a jeweller at Lucknow. He was quoting a price which included 17 % as making and hallmarking charges apart from actual cost of 22 carat gold by weight.

    I may be wrong, but to me 17 % additional charges in the name of “making”and “hallmarking” seem to be too high.

    May I know as to how much should be the ideal “making” and “hallmarking” charges in percentage terms in addition to the actual cost of gold by weight.

    Thanks in advance.

    1. Yeah it does sound high – I normally hear these charges in the range of 10% but if you are actually purchasing jewelery then I am not an expert on that so can’t say with certainty.

  5. Please tell me the differance between 24 carrat postoffice gold ie 99.99% ( reliance gold) price and 24 carrat gold in shop.

    1. It depends from one jeweler to another, and sometimes they create a bit of hassle as well. You really need to check on this aspect before you buy bank gold coins. A lot of people have faced trouble doing this because first they pay a premium to buy it from the bank, and then they are unable to sell it easily and it becomes a headache.

  6. Hello Friends,

    I want to buy gold. I don’t know where to buy? Could anybody please tell me which one is best a bank, a post office or a local jeweler?


    1. Mona, You can buy Gold coins from Khazana Jewellery. They will charge 2% while selling. But when you give them coins then they will give amount according to the Market rate on that day. But we have to pay cash for coin purchasing. If you want to pay with Debit Card or Credit card then they will charge 1.5 percent extra. More ever in some area’s local jewellers will syndicate and put one price. But Khazana will update its rates according to the Market rate.

  7. Neeraj: Dude you rock… You comments helped me a lot… Whoever will read this Article will definately thank you 🙂

  8. Hi to all readers

    depends on your purpose of buying gold coins makes your job easy.
    if you buying is and looking for pure quality without cheating , buy from bank as they gives guarantee instead they charge more getting compare to shop that because of premium that you dnt get it back if you are selling it later on.

    At shop you pay only for the gold price what you buy but same time you have no guarantee of purity so if its for investment for short term better to but from trusty known jeweller shop

    any way enquire by your self and decied

    1. It really depends on what you are comfortable with – the three main options are buying gold coins, buying ETFs or buying mutual funds that in turn own ETFs.

  9. Hi,
    I have just purchased a gold bar for 26500 from a local jeweler. I am concerned about its safety & purity after reading the posts in this thread.
    I would like to know everything one needs to know about Gold ETFs & investing in them.
    Can you please help me Sir?

  10. Dear Mr Kothari,
    Thank you for your inputs that are so valuable for people like me not versed with this field. I have a few querries :
    1. As per your advice,I did go to a few jewellers in Mumbai and found that the coins they claimed to be NIBR certified and in a tamper proof pack, were actually in very flimsy packs … Is it possible to tamper with those packs?… I mean, is it pssible to pack a substandard coin in a pack mentioning NIBR certification for 9995 purity?
    2. There is no seperate certification with these coins although jewellers are ready to mention the weight and the purity of the coins on the pucca bill ( +1% VAT). But the same mention is possible on unpacked coins that are more economical. ( 22700 for 8 gm NIBR , 22200 if loose with a certified bill) . If the bill is going to be the proof, why to insist on NIBR coins?
    3. If NIBR coins are really trustworthy, could I buy them from the NIBR outlet in Zaveri Bazzar and not from a jeweller?
    4. the NIBR website clearly mentions that the source of their gold is refining. This includes dust scrap etc. Is the quality of gold at par with that obtained from Swiss sources….. i e the bank gold coins? Besides, NIBR is not a government institute but a purely private party. is it still that trustworthy as is implied in your blog?

    Kindly answer these querries and oblige.

    thank you.

  11. Buy gold coins only from Banks /Head Post Offices to ensure 99.9% purity in pilfer proof packs. Otherwise youcan be cheated easily in Sarrafa Bazar. Promise have no meanings when you sell these in future for money. It will be your good luck if the price of gold are higher than
    purchased price at that time. Deductions are certain when you sell gold/silver/ornaments in
    Sarrafa Bazar.

  12. I’m planning for buying some gold as investment in near future. Initially I was planning to buy it from SBI/Axis/BANK OF BARODA/BANK OF INDIA/ICICI, but after going through this blog of Manshubhai, especially the Clinical writing of Mr Niraj Kothari, and going through the details of different banks, my conclusion is that its better to buy gold from a reputed local jeweler provided, the gold that supplied is pure as the jeweler claims and certifies that in the bill and also as per correct market rate of the day. But having concluded that now I’m facing some problems:
    1. I live in Karimganj, a remote town in southern Assam. In my area there is only one Hall Mark registered jeweler who sells gold coins occasionally depending on demand and his rates are higher than the market rate of the day too. Others are not registered as far as my knowledge. Our nearest growing town (city) is Silchar, where there are a few Hall Mark registered jeweler but I doubt to trust them.
    Q. What should I do? Please give me some suggestions.
    2. About the selling of gold or exchange of gold in future, the jeweler I visited in my town, in his words – he will buy back the gold at my purchased rate minus VAT%. I think this is also a kind of cheating.
    Q. Is there any Govt. Rules to prevent such type of act?
    3. Mr Niraj, thanks for your explanations about the quality of gold bars and silver bars, which has enlighten me very much, but you have written about the standards of 100gm and 10gm bars. I’m a small employee of quasi-govt. corporation. I can save only Rs 2000/- per month and there is no system advance deposit scheme for gold from the jeweler here. Savings through RD in banks is not an option for me as the amount may not be the same every month or regular. So, if I’ve to purchase gold, I’ve to purchase it every 2 or 3 months, may be in denomination of 1gm coin or 2 gm coin. How can I look for standards you have mentioned? What do you suggest?

    1. Pritom, in your situation you’re probably better off buying a gold ETF rather than physical gold. However, I would like to add that it appears to me that you plan to invest most of your savings in gold, which is not a good idea. You will be risking yourself too much to one asset which has seen a lot of rise in recent times, which also means it can come down in value.

      You’re better off diversifying and invest in different assets and hedge yourself.

      1. Hi,
        Yes, Manshubhai, you are right, but in my place there is not many options left for me. But still I’ve made some investments in different sectors like Mutual Funds (SBI Monthly SIP), ULIP based Pension Plan from LICI and Birla Sunlife (Quarterly Mode), some monthly recurring deposit and some endowment type insurance plans in last one year or so. Now willing to invest the surplus amount that is left with me in Gold for now.
        I’m also doing my home work on direct share trading (in small scale) and other investment options like ETFs, etc. But my knowledge in this sector is limited and need your suggestions.

        1. Okay Pritom – so looks like you already have a lot of investments and want to add gold to that list as well.

          If you are thinking of opening a share trading account then I’d say use that to buy a gold ETF like Quantum or Benchmark Gold Bees. That will kill two birds in one stone, and is going to be cheaper as well, and easier to sell later on as well.

          1. Thanks Manshubhai.
            It seems that for investing in ETFs, one should demat a/c. I’ve few confusions regarding opening of demat and trading a/c : I’ve my saving a/c with both SBI and Union Bank, both of them provide demat a/c facility. Is it better to open a demat a/c with these banks or with the brokers/DP, like Unicon, Indiainfoline, or ShareKhan and taking Netbanking facility from the said banks?
            Also What is trading a/c? What is the difference between demat and trading a/c? Is trading a/c necessary for share trading (in small scales) or ETF investment? How they work together?

            1. You can open a Demat wherever it’s cheapest. You won’t get any additional benefit of opening a Demat from one place to another.

              A demat account is for holding stocks and bonds, while a trading account enables you to buy shares, mutual funds etc. online. In your case it might turn out to be a very good thing because a lot of things are Demat these days and will be accessible to you online. Be sure to open Demat and Trading account together at the same place because that will be cheaper.

              Here is an article about it:


  13. Banks do not buy back gold coins due to RBI regulations & all major jewellers also deduct 2-5% on buy back of coins.

    After taking feedback from our customers, we have introduced a 1 gram coin (which are again not carried by Banks) & a 100% exchange policy on coins (where you can exchange the gold coin with jewellery or other coins at 100% value).

    Personally I would prefer 24 Karat gold coins over 22 karat coins for investment purpose due to their wide spread acceptability.
    Hope that helps.

  14. As you mentioned in the article, bank coins start at 2 gram denomination & they dont buy back coins due to RBI restrictions. Also local jewellers seem to deduct 2-3% on buy back. At caratlane, we have a 100% exchange policy where you can exchange your gold coins at 100% value anytime in the future.

    After taking feedback from existing customers, we have added gold coins starting at 1 gram denomination going along the way to 50 grams (1 gm, 2 gm, 4 gm, 8 gm, 10 gm, 20 gm & 50 gm) coins.

    Also personally i think 24 Karat gold coins make for a better invesment as compared to 22 Karat gold coins due to their acceptance level among retailers.

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