Is Silver a Good Investment This Diwali?
- 4th November 2025
- 12:00 AM
- 8 min read
Are you planning an investment during this Diwali but are confused about where to start? Enter the silver Exchange Traded Fund (ETFs) that are already attracting investors’ attention and potentially doubling their investment. Silver ETFs in 2025 delivered an average return of 102% already. Also, there are other silver investment options such as silver coins, e-silver and more.
However, if you are still looking for an answer to whether is it good to invest in silver this Diwali, read through this blog for more information.
Forms of Investing in Silver this Diwali
To effectively address your concern about whether is it good to invest in silver, you must learn how many ways you can invest in this metal.
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Silver ETFs
If talking about silver ETFs, fund houses buy physical silver, store it in secure vaults and launch ETFs on the stock market. The Securities and Exchange Board of India (SEBI) mandates that fund houses must buy silver of 99.9% purity to list them as ETFs in the exchanges.
Similar to a mutual fund, you can buy Silver ETFs based on the Net Asset Value (NAV), whose value directly depends on the price of physical silver.
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Physical Silver
To emphasise further, is silver a good investment, an investment in simply physical silver might work. Currently, the market suggests a potential trend of price hike of silver and 100 grams of silver stands at INR 17,810. Therefore, you can invest in physical silver, such as silver coins, silver bars, etc.
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E-Silver
Instead of buying physical silver, you can also invest in digital or e-silver. With a demat account, you can purchase e-silver with 999 fineness and store it in your account in a dematerialised form. The main benefit here is that, unlike physical silver, your e-silver stays protected against theft, and therefore, you do not need to worry about its storage.
With PL Capital Group – Prabhudas Lilladher, you can invest in stocks, mutual funds, ETFs and more. Download the PL Capital app, complete an e-KYC and start your investment today!
The Growing Appeal of Silver Investments
Apart from the different forms of investment, a look at the increasing appeal of it to investors might further help answer is investing in silver a good investment.
If you critically think, silver investments usually provide a dual appeal for investors. One of them is in the form of jewellery or silverware, etc, that acts as a precious asset for buyers.
Also, different industries use silver for manufacturing purposes. It might act as a demand booster for silver. Companies manufacturing electronic equipment, solar panels, batteries, charging systems, etc, use silver.
The Indian EV market is growing at a CAGR of 49%. It not only increases the appeal of silver for industries but might help keep silver prices stable and possibly increase. A silver investment might be a tool for wealth management due to its increasing appeal.
Is Silver a Good Investment Compared to Gold?
While looking for an answer to whether is it good to invest in silver, you must have heard about gold investment. Now, if you are not clear about which one you must invest in this Diwali, take note of the insights from the following comparison table for an informed investment decision:
| Parameters | Gold Investment | Silver Investments |
| Accessibility | The gold ETF investment amount is typically based on the per-gram price of gold. Currently, 1 gram of gold costs INR 13,371.20, which might make it expensive. | With a bit more investment, you can buy more silver units of silver ETFs, as 100 grams of silver costs around INR 17,400. |
| Industrial usage | Industrial usage is limited. | Higher industrial usage might place an additional demand on boosting the silver prices. |
| Risk potential | Gold investment might have lower risks, and is suitable for investors with a long investment horizon. | Typically, silver investments are more sensitive to market movements, making it a risky investment but with a higher return potential. |
| Market performance context | Gold might outperform the market when inflation stays low and the market is stable. During a bearish market, it might act as a hedging instrument. | Due to industrial usage apart from personal usage, demand might rise when industries are performing well. Thus, it might perform better in a bullish market. Silver prices might not follow the decline in a bearish situation. |
| Additional expenses (ETF) | Usually, there is no exit load applied when you exit a gold ETF. | In silver ETFs as well, no exit load is applied if you exit the fund early. |
Features of Silver ETFs
Aside from a comparison table, a list of features of silver ETFs also might help to understand if is it good to invest in silver or not:
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Purity
As the SEBI mandates fund houses to invest in silver with a purity of 99.9%, investing in silver ETFs automatically exposes you to high-purity silver. This helps in maintaining your investment valuation.
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No Storage Required
Similar to silver coins, you also keep your silver ETFs in a dematerialised format in your Demat account. This also eliminates the requirement of maintaining a vault or safe to keep your silver secure. However, you must note the expense ratio that fund houses typically impose to maintain the fund. As per the SEBI norms, it is up to 1%.
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Acts as a Hedging Tool
Similar to gold, silver might also act as a hedging tool against rising inflation in the Indian economy. For example, currently the inflation in India stands at 1.54% and if it rises, your ETF investment value might increase.
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Consulting portfolio management services might be effective depending on your financials, investment goals, etc. This is because their expert insights can help you use silver as a hedging tool.
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Helps With Diversification
In investment, there is a proverb that says, ‘don’t put all your eggs in one basket’. It means you must diversify and should not focus on a certain asset. Spreading investment across asset classes helps with spreading risks, and by investing in silver ETFs, you can diversify better.
How to Buy Silver ETF Online?
Now that you have an idea of whether is it good to invest in silver, let us take a look at how you can invest in silver ETFs online. Using the PL Capital app, you can invest in Silver ETFs completely online using these 5 steps as follows:
Step 1: Open the PL Capital app and log in using your credentials.
Step 2: In the app, search for the Silver ETF that you are interested in and select it.
Step 3: Depending on your investment goals or needs, you must choose one or more units of that fund, and input the price to move forward.
Step 4: Choose your preferred payment method, and place the buy order on the application.
Step 5: Approve the payment from your chosen method. Similar to other ETFs, silver ETFs also get credited into your Demat account in a T+1 cycle.
Conclusion
If you are seeking an answer to whether is it good to invest in silver, you must know that the current market trend suggests an uptrend in silver prices. You can invest by purchasing silver ETFs, e-silver, silver coins, jewellery, bars, etc. However, note that although there is an uptrend in prices, such prices are sensitive to personal, industrial demand, etc., and fluctuate.
With PL, invest in stocks, mutual funds, ETFs and more from the PL Capital app. Download it from the Play Store or the App Store and start investing today!
Frequently Asked Questions
1. How does tax apply to silver ETFs?
The STCG and LTCG taxes apply to gains you make by investing in silver ETFs. For STCG, you must pay taxes on it as per your income tax slab rate. For LTCG, it stands at 12.5% without indexation benefits.
2. What does it mean by New Fund Offer or NFO in a silver ETF?
When there is a new silver ETF in the market, you can buy units at the original initial prices. Once this period is over, you must buy units based on the daily NAV.
3. Which factors impact the price of silver in India?
Underlying factors such as global pricing of silver, exchange rate between INR and USD, industrial and investment demand, etc, impact the silver prices.
