Gold Silver Reports (GSR) – As the biggest Indian fiesta, the festival of lights — Diwali — is round the corner, all the people have been ready with their respective to do lists on the auspicious occasion.
Shopping, investing, wedding plans, year-ender travelling plans are some of the most basic things out of which some or the other can be found out on every list during this time of the year. As far as the investment part is concerned, it is advisable that, one should not take their investing decisions based on own beliefs, likes or dislikes towards an asset such as gold or real estate.
Taking the note of ongoing weakness amid Indian stock markets, many investors have shied away even from mutual fund investments. A large number of people have already invested during the auspicious 9-day long festival of Navaratri while some might be waiting for Dhanteras and Diwali. Before putting the hard-earned money into any investment option, an individual should always assess the risk involved with the investing options available.
Following the heightened volatility and elevated risks in Indian capital and currency markets, you may reconsider the traditional investment options such as gold and bank fixed deposits.
Advantages of investing in gold vs fixed deposit
Risk-free investment?
Both gold and bank fixed deposits are generally considered risk-free investments. However, gold prices are volatile and may fluctuate with respect to the international market prices, demand & supply. Gold, being a safe-haven asset, usually witness downside trigger on strengthening US dollar. While, bank FDs are completely risk-free as they have nothing to do with market volatility or fluctuation.
High Liquidity
Both gold and fixed deposits are considered as highly liquid asset. That means, both of these can be converted into cash very quick as compared to any other investments, such as equities, real estate, bonds, derivatives, etc.
Flexibility of time
The tenure which you have decided to invest your money is very flexible with respect to gold and FDs. You can customize your bank FD from a tenure of 7 days to 10 years while there is no such structure or regulation for gold investment.
Fixed returns?
Bank fixed deposits have fixed returns, be it any situation, the customer is eligible to get the desired return as agreed between the bank and the depositor at the time of making the investment. Whereas, the returns on gold investment are subject to various conditions, as discussed above. Notably, gold prices in India have been shuttling between a range of Rs 3,200 and Rs 2,200 for the last seven years.
Loan against investment
Both gold and FDs are such an investment that can avail you a loan of about 80 per cent of the value of the asset. You can take loan against your respective fixed deposits and gold from banks, NBFCs (Non-banking financial company) and several other financial institutions at competitive interest rates which are generally lower than the interest rates levied on personal loans.
