When it comes to gold vs fixed deposits (FDs), determining the better instrument depends on various factors, including your financial goals, risk tolerance, and investment time horizon. Here's a comparison of both to help you make an informed decision.
To effectively compare an investment in gold vs FD, you need to understand the key differences between these avenues. Here is an overview of these differences:
Particulars |
Fixed Deposits |
Gold |
Liquidity |
Depends on the issuer and the type of FD |
Highly liquid investment instrument that you can easily buy or sell whenever needed |
Risk and Returns |
Comparatively low investment risk |
Low-risk investment avenue as it has outperformed inflation and resulted in long-term wealth generation |
Loan Facility |
Can get a secured loan by pledging your FD as collateral |
Can be pledged as collateral and get funding without liquidating the asset |
Investment Horizon |
Ranges from 7 days to up to 10 years |
Option to remain invested as long as you require |
Tax Implications and Benefits |
Interest earned is subject to TDS deduction and gets added to your total income |
Returns earned are considered capital gains, and are taxed accordingly |
Gold and fixed deposits are great options to explore if you're seeking low-risk investment opportunities. However, you may need to assess your risk tolerance, investment horizon, goals, and other such factors before you consider either of them.
Financial Goals: Consider whether you are investing for short-term or long-term goals.
Risk Tolerance: Assess your risk tolerance and preference for stability or potential capital appreciation.
Liquidity Needs: Evaluate your need for liquidity and how easily you may need to access your funds.
Diversification: A well-diversified portfolio may include a mix of asset classes, including both gold and fixed-income instruments.
In summary, the choice between gold and FDs depends on your specific financial situation and goals. Some investors may choose a combination of both to balance risk and returns. Whether you choose to invest in gold or FD, you can easily invest via Bajaj Markets. With a simple online process, you can book an FD or invest in Sovereign Gold Bonds in just a few clicks.
Choosing between gold and FD depends on your risk appetite, investment goals, horizon, and a few other factors. You need to understand the benefits and drawbacks of both avenues to choose the right option.
FDs have a set interest rate, whereas physical gold’s value shifts based on market-linked factors. However, for certain gold securities like bonds, ETFs, and others, the returns depend on the terms and conditions mentioned.
Yes, investing in gold is often considered safe as it offers good returns in the long term and serves as a hedge against inflation. However, the value is influenced by market volatility, so it can fluctuate in the short term.
There are many ways through which you can invest in gold. One of the most popular and oldest modes is physical gold in the form of coins, bars, or jewelry. You can also invest via sovereign gold bonds, ETFs, FoFs, and more.