Silver has emerged as both a precious metal investment and an industrial demand-driven asset. With rising use in solar panels, electric vehicles, electronics, and renewable energy, silver is no longer just a jewellery metal — it’s a strategic commodity.
If you're wondering how to invest in silver in India, this guide covers all available options, risks, benefits, and taxation aspects.
Why Invest in Silver?
Silver acts as:
- An inflation hedge
- A portfolio diversifier
- A precious metal alternative to gold
- An industrial growth-linked commodity
Unlike gold, silver has dual demand — investment demand + industrial demand, making it more volatile but potentially higher returning in commodity cycles.
Ways to Invest in Silver in India
1. Physical Silver (Coins, Bars, Jewellery)
You can buy:
- Silver coins
- Silver bars
- Silver jewellery
- Digital silver via online platforms
Pros:
- Tangible asset
- No demat account required
Cons:
- Storage and safety concerns
- GST applicable
- Making charges in jewellery
- Liquidity spread
Best for: Traditional investors.
2. Silver ETFs (Most Popular Method)
Silver ETFs track domestic silver prices and are traded on NSE and BSE.
Popular Silver ETFs in India:
- Nippon India Silver ETF
- HDFC Silver ETF
- ICICI Prudential Silver ETF
- SBI Silver ETF
- Kotak Silver ETF
- Aditya Birla Sun Life Silver ETF
How to Invest:
- Open demat & trading account with JM Financial Serices
- Search silver ETF
- Buy units like shares
No storage issue. Transparent pricing. Easy liquidity.
Best for: Long-term investors.
3. Silver Mutual Funds
Silver mutual funds invest in silver ETFs.
- No demat required
- SIP option available
- Suitable for beginners
Best for: Small ticket investors.
4. Silver Futures (MCX Trading)
Silver futures trade on MCX (Multi Commodity Exchange).
Contracts available:
- Silver
- Silver Mini
- Silver Micro
Requires:
- Commodity trading account
- Margin funding
Best for: Traders.
High risk due to leverage.
5. Silver Mining Stocks (Indirect Exposure)
India does not have pure silver mining companies.
Indirect exposure via:
Returns depend on company performance, not purely silver price.
Factors Affecting Silver Prices
-
Industrial demand
- Solar & EV growth
- Inflation trends
- US Dollar movement
- Global economic growth
- Gold price movement
Silver is often more volatile than gold.
Advantages of Investing in Silver
-
Inflation hedge
- Industrial demand growth
- Renewable energy demand support
- Portfolio diversification
- Lower entry price compared to gold
- Commodity cycle upside potential
- Hedge against currency depreciation
Disadvantages of Investing in Silver
-
High price volatility
- Industrial slowdown impact
- Commodity cycle dependency
- Currency risk (for global exposure)
- Leverage risk in futures
- Liquidity spread in physical silver
- Taxation on gains
Taxation on Silver Investment
-
Physical silver: Capital gains tax applicable
- Silver ETFs & funds: Taxed as non-equity mutual funds
- Futures: Business income taxation
Consult a tax advisor for updated slab treatment.
Silver vs Gold: Which is Better?
|
Feature |
Silver |
Gold |
|
Volatility |
High |
Moderate |
|
Industrial Demand |
High |
Low |
|
Stability |
Lower |
Higher |
|
Entry Cost |
Lower |
Higher |
Silver may outperform during economic expansion phases.
FAQs
1. What is the best way to invest in silver in India?
Silver ETFs are considered the most efficient and liquid method.
2. Can I do SIP in silver?
Yes, through silver mutual funds.
3. Is silver a good long-term investment?
It can be beneficial during inflation and industrial growth cycles.
4. Is silver better than gold?
Silver is more volatile but may offer higher percentage returns in bull markets.
5. Is GST applicable on silver?
Yes, GST applies to physical silver purchases.
6. Is silver ETF safe?
Silver ETFs eliminate storage risk but remain subject to price volatility.
7. Can beginners invest in silver?
Yes, through mutual funds or ETFs.
- PAN Card
- Cancelled Cheque
- Latest 6 month Bank Statement (Only for Derivatives Trading)
