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Gold Investment V/S Fixed Deposit V/S Mutual Funds – Which is best option?

Fixed deposit, mutual funds, and gold investment are all long-term investments that can provide good returns. There are unique benefits associated with each of them making them distinct from each other, however, while looking for a stable investment option, it is important to understand the difference between the investment options.

Here are the main points of differences between the three investment options:

Fixed Deposit

A Fixed Deposit (FD) is a reliable investment instrument offered by banks or NBFCs which gives investors a higher rate of enthusiasm than an ordinary investment account, until the given development date. It could require the production of a different record. Some highlights of fixed deposits are:

1) Range of tenor is between 6 months to 10 years with guaranteed returns

2) guaranteed interest income monthly, quarterly or yearly depending on the plan,

3) availability of full or partial withdrawal with interest rate,

4) higher interest rates for senior citizens as compared to others.

Also, some benefits of fixed deposit are:

  • it helps in enhancing the economic condition of a country,
  • allows the investor to attain high-interest rate,
  • it is best for long term investment as it can manage the high amount of risk coming its way.

Bajaj Finance is one such company that provides best Fixed Deposit interest rates with all these benefits and features such as flexible tenors, online account management and higher interest rates compared to banks.

Gold Investment

Gold is an immensely precious commodity and an even better investment option.  It’s a luxury as much as an investment. Gold is also considered to be one of the safest options for investment considering the low volatility in its prices. Investing in Gold can be a great way to diversify your portfolio, especially during times of market pressure. It can work as a great support against inflation and other economic duress. Some major reasons to invest in gold are:

  • Gold investment will generally have the advantage of not being affected by inflation. After a point, the prices adjust and align with the inflation rate.
  • It has an inverse relationship with equity investments. Gold being an easy liquidity asset can be traded sold anywhere and anytime.
  • Gold investments are generally easy to understand, making it easier for people with no financial knowledge to easily be able to invest. Since no professional guidance is required, the process is also much easier compared to many other investment options.

Mutual Funds

It is an investment done by a group of investors to invest in securities of bonds, stock markets, and other assets. They are managed by expert money directors, who allow the fund’s speculations and endeavour to deliver capital increases or potentially salary for the store’s fund inspectors. A mutual fund’s portfolio is organized and kept up to match the speculation expressed in its plan.

There are various benefits of mutual funds which would be as follows:

1) liquidity- easy money availability during emergencies;

2) flexibility- availability of various plans to invest;

3) less transaction cost – due to fluctuation in economies, the mutual funds have transaction cost;

4) transparency- investors are provided with markets and schemes with fact sheets, annual reports

5) well regulated– interests of investors are protected, monitored and regulated by the Securities and Exchange Board of India (SEBI) where these funds are operated with complete transparency. These funds are always managed by professional fund managers.

Investing in fixed deposits is an easy and comfortable option as its interest rate does not depend on the market fluctuations, like gold investments. Also, since you can start a fixed deposit account with low amounts, it is a much more preferred form of investment for investors who do not want to invest a higher amount. Fixed Deposits by reputed companies like Bajaj Finance especially, make it easier for salary earners to multiply some of their wealth without having to worry about the risks of losing the invested money. Term Deposits also make for a thoughtful gift for your family members offering them financial stability during times of need.

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