Deposits vs. gold: Which is better?

Deposits vs. gold: Which is better?

Remember how our grandmothers used to stash money under the house tiles in case of emergencies? Or when they bought gold with their savings and hid it? Luckily, we have better options nowadays! Imagine that you have some money you don't plan on spending. Instead of putting it in the bank or keeping it at home - and risking being tempted to spend it - why not invest it to earn a return?

When it comes to investments, you have a lot of options. But the least risky and most popular ones are term deposits and gold. If you're convinced by the idea but not sure which one is right for you, here is a comparison between the two to help you make the right decision. 

But first, what is a term deposit? 

A term deposit is a risk-free investment that offers a guaranteed return over a set period - keeping in mind that the minimum amount you can deposit is 5,000 JOD. Once the deposit reaches its maturity date, you'll get the amount you invested plus interest. But if your term deposit requires 12 months or longer to reach maturity, you have the option to choose to receive returns every month. 

What does it mean to invest in gold?

Of all the precious metals, gold is the most popular and is an investment that's accessible to everyone. Instead of keeping it at home, we recommend buying it from Bank al Etihad to store it in a safe box for more security. Not to mention, it's sold at a competitive price, and you'll get a certificate guaranteeing its authenticity.

What are the risks?

Even though the price of gold fluctuates, it maintains its value in the long term, which brings in higher returns. Term deposits, however, provide returns that aren't affected by external factors like market fluctuations. Either way, both are risk-free. 

What about the returns on these investments?

Because the market fluctuates and the price of gold constantly changes, its returns are unpredictable. Returns from term deposits, on the other hand, are predetermined. This means you'll know what you'll be earning before you open a deposit. That said, your returns will depend on the length of a term deposit and the amount you put in. The longer the period and the greater the amount, the higher the return.

What about the liquidity of these investments?

Gold is a more liquid investment because you can sell it whenever you want. But you must remember that you may expose yourself to losses if you sell at the wrong time.

As for term deposits, they can be tricky because if you want to break a term deposit before it reaches maturity, you'll be charged a penalty fee.

Which one should you choose?

If you're not afraid to take risks and want to put your money in a liquid investment that will give you long-term returns, then you should definitely invest in gold. But if you prefer a less risky investment that'll provide fixed returns, you should invest in term deposits.

Are you ready to invest?

Get your money from under the tiles, dust them off, and get ready to earn returns! You can either open a term deposit through our mobile banking app with these simple steps here,

or visit one of our branches to buy gold or discuss how to diversify your investment portfolio by visiting our wealth management department

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