The Gemological Institute of America (GIA) grades diamond color using letters, with D being the highest grade and Z the lowest. These letter grades are in turn grouped in color ranges.
The top three grades (D, E and F) make up the colorless range.
Diamonds graded with one of the next four grades (G, H, I and J) are considered near colorless.
The remaining three ranges are faint yellow (contains the K, L and M grades), very light yellow (N-O-P-Q-R grades), and light yellow (grades S through Z).
Diamonds whose color is graded G are at the top of the near colorless grading range. It is fair to say that this color is the next best thing after the colorless grades D, E and F.
The other color grades in the near colorless group, i.e. the H, I and J colors, are all more tinted than the G color. However, this tint is so slight that it is usually noticeable only if you look really hard.
Let's see how G color compares with the colorless grades.
It is true that the G grade has more color than D, E or F, but this difference is observable only when a G stone is looked at from the side.
Even then, any variation in color is very hard to make out, and you'd need a really keen eye to make a distinction. And when looked at from the top, a G color diamond is practically as colorless as D-E-F stones.
In sum, to the average customer, G color is virtually indistinguishable from the colors in the colorless range when viewed with the naked eye.
We can safely say that G color stones look colorless to most people, but is there something that makes these diamonds a better choice than stones with higher quality color?
Perhaps the biggest differentiator for G stones is price - this color is cheaper than any colorless grade, and the difference can range from hundreds to thousands of dollars.
If you've determined that your budget allows you to go no higher than the near colorless range, a diamond graded G is the closest you can get to colorless, but without the hefty price tag.
Generally, if you want the best and have the money to buy a colorless stone, it is up to you whether you will get yourself a diamond in the D-E-F range. However, if you are not opposed to saving some money, a G stone will serve you just as well.
Keep in mind that the only time anyone would be able to see the difference between G and a colorless diamond is when they are put next to each other and compared.
Even in that case, you will have to look really hard to spot any difference, and chances are that no one else will be able to tell the color grade of your stone when you are wearing it.
If you are going to have your diamond set in a non-white metal such as yellow gold, how colorless the stone is will matter even less because the reflections of the setting's color will make the stone look a bit tinted.
In such a case, don't bother paying a premium for colorlessness. In fact, you can safely go with colors even lower than G - I or J grades, for example, can be just as good for colored mountings.