Top News

Gold Vs SIP: Regular savings and long-term financial planning are required to accumulate money or become rich. No one becomes rich overnight. You can start with small investments. There are many investment options available in the market. However, it can be difficult to choose which one will be best for you and which one will give better returns. Most people choose gold, mutual funds, and fixed deposits for investment.

But let us tell you that every investment option has risks and benefits. Based on their historical returns, they are suggested for different investment periods. For example, highly volatile equity-linked products are usually not suggested for short-term investments. In this case, one can opt for hybrid funds, debt instruments, or fixed deposits. Similarly, for the long term, one can invest in equities or gold, as these have the potential for higher returns and can help spread the risk over a longer investment period.

While both gold and equities look attractive, they come with their risks and benefits. Equity mutual funds sometimes have the potential for exceptional returns, which can be up to twice that of FDs. Gold, on the other hand, is a more preferred asset for risk-averse investors. The yellow metal has been a safe investment option for many due to its stable returns. As per past trends, investors can expect returns of around 10% per annum from gold.

Which is better, gold or SIP?
If you are planning for an investment period of 15 years, then both gold and mutual fund SIPs can be suitable options. But the final decision should be taken based on your risk appetite and financial goals. Let us understand how both SIP and gold can be beneficial for monthly investments.

Mutual Funds
Tenure: 15 years
SIP amount: Rs 5,000 per month
Expected return: 12%
Amount invested: Rs 9,00,000
Expected return: Rs 16,22,879
Net worth: Rs 25,22,879
Bought MacBook Pro from Vietnam, enjoyed vacation, and still saved Rs 36,500 over the Indian model: Here's how
Gold:
Tenure: 15 years
Amount invested: Rs 5,000 per month
Expected return: 10%
Amount invested: Rs 9,00,000
Expected return: Rs 11,89,621
Net worth: Rs 20,89,621

As seen, mutual fund returns look more attractive over 15 years, as they benefit from higher expected returns and the power of compounding. However, SIP plans are considered high-risk instruments and returns are never guaranteed. While returns are not guaranteed in gold either, it is considered safer than mutual funds. In any case, it is advisable to discuss your financial goals with an expert before making significant investments.

Disclaimer: This content has been sourced and edited from News 18 hindi. While we have made modifications for clarity and presentation, the original content belongs to its respective authors and website. We do not claim ownership of the content.