Gold and fixed Deposits which Is Better?

Do you want to place your savings in a safe place with minimum growth potential or somewhere where they will grow? The answer to that question should be obvious. You want your money to grow. You can put a lump sum in the bank in a fixed deposit and get a decent interest rate over twelve months or you could take the money and invest in some gold. When it comes to investing your money, the answer lies in the risk you are willing to take. But there is a little bit more to it than just risk. There are a couple of factors you should consider.

Rate of return

It is important to understand that the price of gold fluctuates in the short term. However, in the last couple of years, the steady rise of this precious metal suggests that you may get a lot more returns if you keep your money in gold. Between 2000 and 2019, the median growth of gold has been around 8.91 percent.

The returns you can expect from a fixed deposit are guaranteed. They come up with interest rates fixed over an annual period. These rates are often higher than the daily rates your bank pays you on a savings account. Banks will usually pay you more interest if you keep your savings with them for longer which is why people put their money in the bank. It is better to keep your money in the bank than to keep it under the mattress where it is not safe and does not earn an interest anyway.

Potential risks

Fixed deposits with their fixed interest rates aren’t good for weathering inflation and other economic storms. For example in 2020, the inflation rate was approximately 2.10% p.a. but the inflation had risen to 10%. This means that the rate of return from Fixed Deposits could barely stand against inflation. In times of high inflation rates, your money would lose its value.

Gold on the other hand does very well in inflationary times. It is regarded to be an effective hedge. Once you take a look at the rise in the price between 2014 and 2018 you will see that it has risen in line with inflation. Instead of coming off badly with your investment, you will make off better than someone who is depending on the bank interest rates to see some growth in their investment. Gold returns are also not fixed so you can see it as an alternative of some sorts.

When you have gold you are able to enter and exit the market as you would like. Gold is very liquid and you can sell to a gold dealers Brisbane whenever you are ready to liquidate. But like all investments, you need to time your withdrawal. Yu could come off too quickly and lose your money.

So, which is better?

If you a looking for higher returns and safety then by all mean, gold is the better choice. There is no shortage of gold dealer Brisbane who will offer you more than what a similar investment in a Fixed Deposit could offer you. Gold is regarded as a better long term investment and you would see why if you charted the trajectory of the gold price in the last decade. However, there are no guarantees. If you feel like you want to exit the market, find a reputable gold buyer near you who will buy bullion at good prices. Right now the market is good for gold buyers on either end. Those with money who want to safeguard their wealth against instability and uncertainty. With gold you will be able to offset the risk you might be exposed to in the market.