Investment in Gold or Fixed Deposit

Gold and fixed deposit are two investments which everybody makes during his or her lifetime, but in past few years gold has risen too fast and that is the reason why now people cannot make investment in both asset class and they have choose between any one of them. Before making any investment one should compare the excepted returns which one may get from these two investments over long period of time.

Gold and Fixed Deposit comparison

10 grams of gold is currently trading at rupees 30000 and many people who are the age group between 25 to 30 years want to invest money in gold for 20 years so that they can have secure future. Now this investment is based on the assumption that gold will perform as good as it did in past 12 years which is dependent on so many factors and therefore one cannot say with 100 percent conviction that gold will perform like that.

As far as fixed deposit investment is concerned, in a country like India where the rate of interest is around 8 to 9 percent per annum if one invest his or her money now than after 20 to 25 years the investment will become 8 times because in every 8 years the investment in fixed deposit gets doubled (assuming the rate of interest is between 8 to 9 percent).

So if you have 30000 rupees and if you invest that into fixed deposit than after 25 years it will be worth 240000 rupees and ask yourself whether 10 grams gold will be 240000 (30000*8) since we are comparing with fixed deposit and if the answer is yes than one can invest into gold otherwise an assured return from fixed deposit investment is good option. In developed countries like USA, UK, Canada where the rate of interest is very low this comparison is of no use because there people are much better off in investing their money into gold than investing the money in fixed deposit, however in a country like where due to inflation rate of interest are high an individual is much better off investing his or her money into fixed deposit rather than investing money in gold.

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