From a young age we have been taught that keeping your money in the bank is safer than hiding it under your mattress. But cash will only retain its value if it is earning more in interest than the rate of inflation, and there are no bank accounts paying anything near the double-digit inflationary levels.
Low paying interest rates that can’t keep up with inflation coupled with escalating counter-party bank risk beg the question: should I purchase gold or leave my cash in the bank?
Gold vs other assets
This graph tracks how much an investment made in 2000 of £10,000 in gold or a bank savings account would be worth,.
Cash left in a savings account for the same period:
- would be worth £17,500, the worst-performing investment choice.
As you can see, £10k invested in gold:
- would have been worth £83,700k at the end of 2022, significantly more than the rise in inflation
Banks began as institutions that existed to store money. They are one of the linchpins of the global economy, with the amount of interest paid to those who store money there a matter of concern for national governments and financial institutions. In conventional wisdom, banks are the place to store cash, as well as other financial instruments and asset classes including many kinds of bonds and equities.
Banks want more capital to invest for profit, and they provide a useful service to customers looking to borrow money in order to gain more capital. Storing wealth in the bank is convenient in the short term and reasonably secure from external theft, as advanced encryption protects a customer’s money, along with heavy security measures.
Want to learn more about physical gold investment?
Discover how physical gold and silver investment could protect your wealth and pension. Get started today with our Free Investors Guide.
Want to find out more?
We’re available to discuss any questions you may have by telephone or a visit to our London offices at 1 Royal Exchange.
- Reputable & fully accredited
- Buy-back guarantee
- Fully certified metal
- Free delivery or storage
- Customer focussed
- No hidden charges
- 5 star independent reviews