How to Invest in Silver Mutual Funds in India
A beginner-friendly guide to investing in silver mutual funds in India, including benefits, risks, and how to get started easily.
Rajat Kulshrestha
Head of Mutual Fund Distribution
A beginner-friendly guide to investing in silver mutual funds in India, including benefits, risks, and how to get started easily.
Rajat Kulshrestha
Head of Mutual Fund Distribution
Most Indian investors think of gold when they consider commodity investments. Silver has started drawing attention for different reasons. Industrial sectors like electric vehicles and solar panels now consume silver at a scale that supports its long-term price outlook. Silver investment has become a popular option, yet the storage and purity concerns around physical silver have led to the search for better alternatives. One such alternative is silver mutual funds. For investors asking how to invest in silver mutual funds, the process is more accessible than most people expect.
This silver mutual funds investment guide covers every step needed to get started without prior investment experience.
A silver mutual fund lets investors participate in silver price movements without buying or storing the metal physically. Most products in this category operate as a Fund of Funds. The fund collects money from investors and puts it into a Silver ETF. That ETF holds physical silver of 99.9% purity in secured vaults on behalf of investors.
SEBI approved Silver ETFs in India in 2021. Several fund houses have since launched both ETF and FoF products.
Two layers sit between the investor and the silver. The investor buys units of the FoF. The FoF holds units of a Silver ETF. The ETF holds actual silver. When silver prices move, the NAV of the fund reflects that change.
Investors in silver mutual funds India through the FoF route do not need a Demat account. Units get bought and sold like any regular mutual fund through an app or platform. That makes FoFs more accessible than buying ETF units directly on a stock exchange.
Explore Silver Mutual Funds with Expert Assistance
Start InvestingThe table below breaks down both options available to Indian investors looking at how to invest in best silver mutual funds in 2026.
|
Type |
How It Works |
Demat Account Needed |
SIP Option |
|
Silver ETF |
Traded live on NSE/BSE |
Yes |
No |
|
Silver ETF FoF |
Mutual fund investing in a silver ETF |
No |
Yes |
The FoF structure supports SIP in silver mutual funds starting from ₹100 monthly. Direct ETF suits investors who already operate through a Demat account and want live pricing.
These are the practical silver ETF investment steps for the FoF route:
Open a demat and trading account. Choose a registered broker.
Compare funds on expense ratio, AUM size, tracking error, and 3-year performance before selecting one.
A lump sum works for investors with a defined amount ready. SIP spreads the investment monthly and averages the purchase price.
Minimum investment across most silver FoFs starts from Rs 100. Confirm and units get allotted at the next NAV.
Here are the most widely tracked silver FoF options for investors researching how to invest in silver mutual funds as of 2026.
|
Fund Name |
3-Year Returns (approx.) |
Min SIP |
Expense Ratio |
|
Nippon India Silver ETF FoF Direct |
~40% CAGR |
Rs 100 |
Low |
|
ICICI Prudential Silver ETF FoF Direct |
~40% CAGR |
Rs 100 |
Low |
|
HDFC Silver ETF FoF Direct |
~40% CAGR |
Rs 100 |
0.23% |
|
Axis Silver FoF Direct |
~40% CAGR |
Rs 100 |
Competitive |
|
DSP Silver ETF FoF Direct |
~40% CAGR |
Rs 100 |
Low |
Past returns do not guarantee future results. Read the scheme information document before investing.
The comparison below covers the key differences across all three options for investors evaluating how to invest in silver mutual funds.
|
Parameter |
Silver Mutual Fund |
Gold Mutual Fund |
Physical Silver |
|
Storage needed |
No |
No |
Yes |
|
Demat account |
No (FoF) |
No (FoF) |
No |
|
Volatility |
Higher |
Moderate |
Higher |
|
Min investment |
Rs 100 |
Rs 100 |
Market price per gram |
|
Liquidity |
High |
High |
Low |
|
LTCG rate |
12.5% after 24 months |
12.5% after 24 months |
Same as FoF |
|
Industrial demand |
Strong (EVs, solar) |
Limited |
Strong |
Understanding how to invest in silver mutual funds not enough. The reasons to actually do it matter equally.
Plan Long-Term Wealth with Silver Mutual Funds
Get Started TodayHere’s what to keep in mind:
Tax rules updated after the Union Budget 2024 apply through FY 2026-27.
|
Holding Period |
Tax Applied |
|
Under 24 months (FoF) |
Slab rate as short-term capital gains |
|
Over 24 months (FoF) |
12.5% long-term capital gains, no indexation |
|
Under 12 months (direct ETF) |
Slab rate as short-term capital gains |
|
Over 12 months (direct ETF) |
12.5% long-term capital gains, no indexation |
Silver ETF investment suitability depends on financial goals.
Beginners can open a ₹100 monthly SIP and increase it gradually once they understand how to invest in silver mutual funds and how silver prices behave.
Silver mutual funds remove the two biggest barriers most Indian investors face with commodity investing: one is storage, and the other is high entry costs. Monthly investments start from ₹100, and the fund holds the silver on the investor's behalf. For anyone working out how to invest in silver mutual funds, the FoF route is the most practical place to begin in 2026. No Demat account, no storage, and full SEBI oversight.
My Mudra helps Indian investors make better financial decisions across both lending and investment planning. For investors managing existing loan obligations while looking to build commodity exposure through how to invest in the best silver mutual funds, My Mudra connects them with regulated financial partners who provide structured guidance on managing debt and building a balanced financial plan simultaneously. Better loan management often frees up the monthly surplus that makes consistent SIP investing possible.
Also Read:
- How to Invest in Mutual Funds Online in India (2026)
- Best Silver Mutual Funds in India (2026)
80% of Indians haven't invested in Mutual Funds yet! Take charge of your financial future—don't just follow the crowd. Start your investment journey today and invest in mutual funds that match your financial goals and risk profile. Let your money work for you.
INVEST NOWHead of Mutual Fund Distribution
Rajat Kulshrestha brings over seven years of experience in public markets, specialising in fundamental analysis and valuation frameworks. In his role as Mutual Fund Distribution Head, he oversees portfolio strategy, asset allocation decisions, and fund evaluation processes. On this blog, he offers structured, research-oriented perspectives on SME-listed companies, aiming to enhance financial literacy and analytical depth among market participants.
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