E-Gold and E-Silver from NSEL

This is yet another post from the Suggest a Topic page, and this time we’re going to look at the E-Gold and E-Silver series from NSEL (National Spot Exchange Ltd.)

NSEL enables you to buy gold, silver and copper in electronic form, and hold it in a Demat account.

This opens up another avenue for people interested in buying metals electronically, and now you have another option in addition to gold ETFs, and trading in the commodity exchange.

An Overview of buying E-Gold, E-Silver or E-Copper through NSEL

Opening a separate Demat and Trading account for trading in NSEL

First of all you will have to open a Demat and Trading account with one of the authorized participants with NSEL.

This has to be a separate trading account from the one that you might be using for trading stocks.

There is a list of authorized depository participants (DPs), and you can open an account with any of these to start trading in NSEL.

You can expect to pay an initial charge of about Rs. 350 or so for opening the Demat account depending on who you open this with, and then expect a slightly lower AMC (Annual Maintenance Charge) of about Rs. 250 or so every year on this account.

Some DPs might offer you a scheme where if you give them a refundable deposit of Rs. 2,000 they will waive off the opening charges, and subsequent AMC, so you can check that up.

To open an account go to this link and look up a member in your city, and talk to them.

You will require documents such as PAN, 3 passport photographs, bank proof, and address proof.

Buying E-Gold, E-Silver or E-Copper through NSEL

Once you have your account set up, you can then carry out transactions. You can buy gold, silver or copper, and one unit of the E-Series is equivalent in the following way:

1. E-Gold: 1 gram

2. E-Silver: 100 grams

3. E-Copper: 1 kilo

The commission to transact is about 0.5% if you take the delivery, and 0.05% for intra – day trading. I use the word about because these might differ from one broker to the other, and I wanted to give you gauge of what you can expect.

You can trade the E-Series from 10:00 in the morning to 11:30 in the night on weekdays, and the settlement is done on a T+2 basis.

The price of the three contracts is visible on the website of NSEL, and once you buy a contract, it will be credited to your demat account after settlement.

Converting E-Gold, E-Silver or E-Copper in Physical Form

You can hold the E-Series products in Demat form, and you also have the option of converting it into physical form – this is known as rematerialization.

There are two key things to note here:

1. Rematerialization is currently not done in every city, so if you need this option, then check with the agent first.

2. VAT: When you rematerialize you will have to pay some rematerialization charges (which will be in the range of Rs. 200 for 10 grams gold), but the VAT might be a bigger amount based on how much electronic quantity you hold.

Currently, there are no holding charges, but I don’t know how far this will continue, so you can expect to pay holding charges sometime in the future, if not immediately.

Information I couldn’t find on E-Series Products

There were a couple of things that I wanted to find out, but wasn’t able to get to, and I thought they were meaningful enough to be shared here, and see if anyone else knows about them.

Does SEBI regulate these E-Series Products?

If someone faces an issue with NSEL, or the E-Series products, then who should they address it to. Can they go to SEBI? Is SEBI actively regulating it or does it fall under the purview of some other agency.

Does anyone hold the underlying physical gold?

Gold ETFs hold underlying physical gold equivalent to the number of units of funds they have issued, and they publish the data periodically, but I didn’t find information on who holds the physical gold, or if at all it is being held at somewhere at all times.

If everyone who holds a E-Series contract requests for gold rematerialization then what will happen.


There are no silver ETFs right now, so this is an alternative if you’re looking to invest in silver, but there are gold ETFs that you can look at if you’re looking to invest in gold.

This product doesn’t have a long track record, so even if you are interested in buying E-Gold or E-Series – I’d say it’s better to be safe than sorry, and start off with smaller quantities.

130 thoughts on “E-Gold and E-Silver from NSEL”

  1. how to open a Demat and Trading account with one of the authorized participants with NSEL?

    can any one tell list of authorized depository participants (DPs), which i can open an account with any of these to start trading in NSEL?

  2. NSEL is not allowed to trade, there is a huge confusion and people who have invested in it are not sure when they will receive their investments back. I had invested in e-gold and e-silver, and have requested my broker Karvy for delivery, however even he is not sure when I will get back the physical delivery.

  3. That is a great article, but im still confused about this whole procedure. Honestly its not my cup of tea. HOWEVER, im planning to start investing, something small, 10k to be specific. Is that an ok amount? coz with the brokerage charges and stuff, I dont know if ill actually make a profit at the end. I just want to buy egold and sell it after a few days just to see how it works. Im also wondering, what if i just keep buying and I dont sell. SO, how and what would someone suggest me to start off with? any known and trusted members/DP’s who I can contact? any suggestion will be greatly appreciated.

  4. I shall be thankful if someone, who is already investing in e-gold, e-silver etc., let us know about the brokerage and other charges they are paying.
    Please do mention whether you are investing online or offline and the trading platform if investing online.

    If someone though not investing, have the above information, please do share.

  5. Hi Nikhil
    It is very simple.
    Do you purchase/invest in shares. It is just like that.
    Otherwise, let me explain.
    Just contact a broker, who is a trading member of NSEL and ask for an account opening form (link for list of brokers has been posted by me above OR visit NSEL website, it is available there).
    Fill the application form and send it to the broker along with documents required, to open trading account and demat account and you are done.
    The broker will open your account in 5-7 days or so, and you can invest for e-gold, e silver and other e-commodities online or offline as the case may be.
    But take care, as not many brokers are dealing with e-commodities, the brokerage is very high.

  6. Dear Manshu,

    In your article above you have said that E-Series (gold, silver..) are new products and since there is no track record so we should be careful and invest in smaller quantities…

    I thought these are only demat form of actual metals and the person buying it has full right to the bought quantity of gold/silver which is stored with NSEL…

    Request you to elaborate what kind of risks you are referring to..



    1. Dear Anshuman,

      This article is a bit old and at that time these products were fairly new and had a lot of questions unanswered. Now, there is better knowledge about them, and people have also converted them to physical gold, so some of the things I had written at the time are probably no longer valid.

  7. Hi Manoj,
    There are plenty of occasions when spot price of gold (e-gold price) will be greater than future price of gold, it would imply that in the short term the gold market is bearish on the price of gold, unless there is some fresh economic data that changes the market sentiment.
    Overall there are macro economic, micro economic, geological factors that influence the price: e.g,
    US releases the FOMC data (Federal reserve) in a planned date every month that tells if they would modify the interest rates of borrowing, would they indulge in quantitative easing, etc. Similarly Europe too there would be data pertaining to Euro zone bonds sale for Germany, Spain, France etc and whether they would raise or diminish the interest rates.
    In India there is a festive season and hence it is likely that there is a demand for gold in the short term. If there are huge reserves of Gold reserves/there is an acute demand for physical gold by Central banks it would impact the price of gold accordingly as and when the news is released in the market.

    Overall it is the superimposition of all these economic data that results in a price impact in Gold. Please note, this is purely per my limited assessment of how the markets have reacted to the price of gold and I am sure there are plenty of finer details that I must have omitted.


  8. Hi,
    could anyone share why the price per gram of eGold (from NSEL) is higher than the price at MCX? what are the different factors which increase the price of eGold units from that of MCX price.

  9. I *sniffed* a flying piece of information and am posting it for validation, if anyone knows anything about it. I was told that upon accumulating 8gms of e-gold, one can get a credit note kind of thing from MMTC in exchange of that 8gms (i.e. after remat’ing it). This credit note is just another way of taking physical delivery. It seems we can present this to any jeweller who sells MMTC products or go to a MMTC outlet. You can buy jewellery with it or convert it to cash at the rate running at the time of presenting it.

    Anyone hear/knows about this?

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