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JEWELLERSINCITY
India's Premier Directory

Gold vs FD vs Mutual Fund

Which Investment Grows Your Money More? — Data-driven comparison

Compare Investment Returns

₹10,000₹50 lakh
Physical Gold
★ Best

8% CAGR (20yr historical avg)

Sovereign Gold Bond
★ Best

8% gold + 2.5% interest = 10.5% effective

Fixed Deposit
★ Best

7% p.a. (average bank FD rate)

Equity MF (NIFTY 50)
★ Best

12% CAGR (NIFTY 50, 20yr historical)

Past performance is not indicative of future results. Returns are illustrative and based on historical CAGR averages.

Historical CAGR Data (India, 20-Year)

Source: IBJA, BSE, RBI — approximate 20-year CAGR figures

Equity MF (NIFTY 50) 14% CAGR
Gold (Physical/SGB) 10.5% CAGR
Fixed Deposit 7% CAGR

Risk vs Return Matrix

Low Risk, Low Return

Fixed Deposit

Guaranteed returns, capital safe, low inflation-beating ability. Best for: conservative investors, senior citizens, short-term goals.

Low-Medium Risk, Moderate Return

Sovereign Gold Bond

Government backing + gold appreciation + 2.5% interest. Best for: medium-term wealth preservation, portfolio diversification.

Medium Risk, Moderate Return

Physical Gold

Price volatility but long-term store of value. Storage costs, no income. Best for: cultural reasons, tangible asset holders.

High Risk, High Return

Equity Mutual Fund

Market-linked, volatile short-term, historically highest long-term returns. Best for: long-term investors with 7+ year horizon.

Frequently Asked Questions

Over 10–20 years, gold has outperformed FDs in India. However, gold is more volatile short-term. FDs are better for capital preservation and short-term goals; gold is better for long-term inflation hedging.
Equity mutual funds have historically delivered higher long-term returns (~12–14% CAGR vs ~8–10% for gold). However, gold has lower correlation with equities — a mix of both reduces portfolio risk.
Most financial advisors recommend 10–15% of portfolio in gold for Indians. It acts as a hedge against currency devaluation and equity market crashes.
Yes, in most cases. SGBs give 2.5% annual interest (Gold ETFs give zero) and capital gains at maturity are tax-free (Gold ETFs attract 20% LTCG). The only downside is lower liquidity vs ETFs.
Gold's nominal CAGR is ~8–10% over 20 years. With India's historical inflation at ~5–6%, the real return is roughly 2–4% — still positive and better than bank savings accounts.

Assumed Rates Used

Physical Gold CAGR 8%
SGB Effective Rate 10.5%
Bank FD Rate 7%
NIFTY 50 CAGR 12%

Rates are indicative historical averages. Actual future returns may vary.

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