When it comes to gold or FD, knowing which is better will help in making informed investment decisions. While both are traditional and widely popular investment avenues, they have their benefits.
By understanding the benefits of gold vs FD and comparing them, you can choose the ideal instrument. So, read on to learn more about these instruments and choose a suitable one that best suits your requirements.
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 you have |
Gold is a highly liquid investment instrument that you can easily buy or sell whenever you need it |
Risk and Returns |
Fixed deposits have comparatively low investment risk |
Gold is also a 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 |
Pledge your gold as collateral and get funding without liquidating the asset |
Investment Horizon |
Ranges from 7 days to up to 10 years |
With physical gold, you can stay invested as long as you want |
Tax Implications and Benefits |
The interest earned is subject to TDS deduction and gets added to your total income |
The returns you get from gold are your capital gains, and are taxed based on that |
A fixed deposit is a financial instrument that offers returns at a predetermined interest until maturity. You can open an FD at any commercial/public bank or NBFC. One advantage is that FDs offer higher interest rates than a conventional savings account.
It also offers a slew of other benefits that make it a more appealing investment option. For new investors with a low-risk appetite, FDs are an excellent place to begin their investment journey.
Gold is among the traditional instruments that many rely on. One key reason for this is that gold is a way to hedge against inflation as its value does not get eroded with inflation.
This, coupled with its liquidity, allows you to lower your risk. There are now several ways to invest in gold, making it more accessible than ever. Some of these options are ETFs, bonds, FoFs, and more.
Gold and fixed deposits are wonderful options to explore if you're seeking low-risk investment opportunities. To choose from gold vs fixed deposits, you need to assess your risk tolerance, investment horizon, goals, and other such factors.
You should also compare gold vs FD returns, to understand which avenue would be more suited for your needs. It is crucial to remember that while both offer several benefits, they also come with some drawbacks.
In gold investments, you will need a sound understanding of market trends to know when to exit and protect yourself from monetary loss. On the other hand, FDs come with a set tenor, and you may not be able to access the invested funds before the period ends without incurring a penalty for premature withdrawals.
So, consider these factors as well while deciding between FD vs gold. Whether you choose 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.
With FDs, the rate you get depends on the issuer, tenor, and some external factors. For gold, the returns depend on the mode through which you invest. Currently, you can invest in FDs that offer returns of 8.60% p.a, or even higher.
Yes, investing in gold is 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 bonds, ETFs, FoFs, and more.