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Fixed Deposits Vs Gold - Investing decision made simple

By Aayush Upadhyay

1st Apr 2022

3 mins read

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Not all of us are good with taking DOGE to the moon and then crash landing all our investments the next day. Chasing calm a little while growing your assets has the most value proposition if you ask us. This is where Fixed Deposits - FDs and Gold come in. Let us explore the difference between these 2 investments in this blog.


The age-old, traditionally important method of investing still stands its ground as a low-risk option. Gold, especially in today’s time, provides so many investment avenues. Gone are the days when all you bought was Jewelry today; you can buy Gold in the form of Digital Gold, Gold ETFs and Sovereign Gold Bonds. Gold is always considered a safe option to invest money, considering it counters the market volatility well and helps wealth in the long run.

What about Fixed Deposits?

Fixed Deposits are financial instruments that guarantee a fixed return on your money on maturity. These FDs are offerings by Banks and NBFCs (Bank type Institutions). With Fixed Deposits, you lock in your money with the Bank for a period, which earns you interest. FDs are likely to give you higher returns than your savings account, as well as many other advantages such as loan collateral and wealth creation over the long term. In the 1990s, FDs were thought to be a good investment option. But we are three decades ahead now, and declining interest rates and rising inflation have made them an unpopular choice among the younger generation.

Gold Vs Fixed Deposits

Fixed Deposits (FDs) Gold
Risk Profile A fixed-income instrument, FDs offer low risk and no volatility. Low Risk. Still, there is volatility due to economic factors.
Return on Investment 8% compounded annual growth over the past 30 years. (Today maximum rate of return is 5.4%) 9.8% yearly growth over the past 30 years.
Liquidity FDs are dependent on tenure. Still, it can be withdrawn by incurring some charges. With the innovation of Digital Gold and Gold ETF, it has much more liquidity than FDs.
Wealth Creation FDs are not known to create wealth over the long run, but you will get guaranteed returns on your deposit. Gold is not for wealth creation, it’s an asset which provides a safe barrier against volatility in the Economic market. Gold builds value over a very long time.
Taxes FD gains are taxed as per your Income Slab. Profits from Gold are coined under ‘Capital Gains’ and have Indexation benefits.
Loan against Investment Most banks provide loans against 90% of the value of FDs at a nominal Interest Rate. Physical Gold, Digital Gold and even SGBs can get you loans against your investment.

Well, we hope this lets you make an informed decision. Investing in FDs can help you get guaranteed and secure returns. With Gold, you can generate wealth in the long term while saving taxes.

Now, if Gold attracts you more, then be sure to check out Spenny, which can invest in Gold automatically every time you spend online.


How does Inflation impact my FD returns?

Inflation, in simple terms, is goods and services getting expensive. The idea with INvesting your money should be to generate more returns than Inflation so that your money will still be valuable later.

How much should someone invest in Gold?

With the nature of Gold as an Asset, ideally, one should invest at least 10% of their investment portfolio into Gold. It can be anything, Digital Gold, SGBs or even Gold ETFs.

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Made with ❤️ in India