Gold investment and deposits are two instruments that are quite popular among the public. Not without reason, the popularity of gold investment and deposits is obtained because it is considered a safe choice in investing, especially for friends who are new to the world of investment.
Although both are known for their safety in investing. However, both have different characteristics, both in terms of profit, risk, and flexibility.
Therefore, let us review in depth the comparison of gold investment and deposits so that you can choose the right decision in your first step of investing.
1. Introduction to Gold Investment and Deposits
Gold investment is an investment made by buying gold and then selling it at a later date. There are various types of gold such as gold bars and digital gold. Gold is known as a safe haven asset because its value tends to be stable and resistant to inflation.
Meanwhile, time deposits are products offered by conventional banks. Deposits provide growth from the assets owned by your friend according to a predetermined period of time. By offering higher interest rates than regular savings. Deposits are considered a low-risk investment just like gold.
2. Comparison of Gold Investment and Time Deposit
- Profit Potential
In comparing gold investment and deposits from the aspect of profit potential, gold has a higher profit potential in the long run because its price tends to rise over time. In the past few years gold has shown a significant increase.
This increase will accelerate during an economic crisis. Therefore, gold is perfect for people who want to protect their assets from economic uncertainty. Although the price of gold may fluctuate in the short term, the long-term trend is upward.
On the other hand, time deposits provide more stable returns as the interest offered is predetermined. With a fixed interest rate, investors can clearly predict how much profit they will get in a certain period.
You also need to know that deposit withdrawals can only be made within a predetermined period of time. If you want to withdraw before the specified period, an additional fee will be charged. This makes deposits inflexible and not suitable for emergency funds.
- Risk
Gold investment and deposits have different risks, gold has higher price fluctuations than deposits. Although gold prices tend to rise in the long term, in the short term, gold prices can fall due to global economic factors, currency exchange rates, or monetary policy.
Therefore, investors who want to profit from gold need a long-term investment strategy and an understanding of market trends.
Meanwhile, time deposits are safer as they are not affected by market volatility. In addition, deposit funds are guaranteed by LPS, so you don’t have to worry about losing your funds if the bank goes bankrupt. However, there is a risk related to interest rate policy, where deposit interest rates can change at any time based on central bank policies. If the interest rate drops, the profit from the deposit will also decrease.
- Liquidity and Ease of Access
Gold is quite liquid as it can be sold at any time according to the market price. However, if you invest in physical gold, there are additional costs such as storage and buy-sell price spreads that need to be taken into account.
This price spread is the difference between the buying price and selling price of gold, which can affect the final profit earned. However, now there is no need to think about additional storage costs. Because you can invest in practical digital gold at Treasury.
Deposits have lower liquidity as the withdrawal of funds can only be done at maturity. If withdrawn prematurely, investors may be penalized or lose the interest they have earned.
Therefore, deposits are more suitable for investors who do not need funds in the near future and can allocate their money within a certain period.
3. Gold Investment and Time Deposits, Which One is Profitable?
The choice between gold investment and time deposit depends largely on each individual’s investment goals and risk profile.
If you are looking for a long-term investment with greater profit potential and want to protect your assets from inflation, gold is a better choice. However, if you prioritize security and stable income without major risks, a time deposit could be the right choice.
Treasury pals need to know that the main factor of gold price increase is “supply and demand”. Gold is a finite natural resource so in the future it will have a large increase due to its scarcity. Meanwhile, deposits are influenced by the benchmark interest rate from Bank Indonesia and financial indicators from banks.
If you are interested to start investing in gold in a more practical and secure way, digital gold at Treasury can be the right choice. With ease of transaction and real-time gold price monitoring. What are you waiting for? Let’s start investing in digital gold easily only at Treasury!
