Storing wealth: is gold a more reliable choice than hard currency?
Placing a Grand Down on Gold: Is It Wise?
Attaching a grand to a gold bar might send chills down your spine, as the thought of investing in this yellow metal can seem risky. Like any valuable asset, the price of gold, also known as the gold market, fluctuates based on factors outside of your control.
Stashing your cash away into an Individual Savings Account (ISA) or a bank savings account seems like a safer bet to secure your money. Here, your money gathers interest, shielding it from rapid devaluation.
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However, with inflation hovering around 3.4%, and the best savings accounts offering no more than 5% interest, the true value of your saved money might not shine as brightly as you'd expect after considering inflation's erosive effect on purchasing power.
HSBC Fixed Rate Cash ISA
If you tucked £1,000 into gold last year, according to research from The Gold Bullion Company, it would have returned significantly more than placing it into a savings account.
4.10%
This wouldn't come as a surprise to a gold skeptic, considering the gold market experienced a boom due to increasing turmoil in global markets in the recent past.
£1,041.00
"Gold's triumph in 2025 was due to both its safe haven appeal and its status as a highly liquid and preferred reserve asset," said Tom Stevenson, an investment director at Fidelity International. "In a quest for alternatives to the U.S. dollar and dollar-denominated assets like U.S. Treasuries, gold becomes a go-to haven yet again."
£41.00
While this circumstance is specific, many believe that cash remains king for the long haul. Yet, over the long term, does gold surpass cash as a store of value?
£1,319.40
Gold Against Savings
£249.82
Our colleagues at the Gold Bullion Company compared putting £1,000 into various popular high-street savings accounts for a year against investing it in gold.
-£208.82
As per their research, the highest return from a savings account in May 2025 was the Fixed Rate Cash ISA from HSBC. An Annual Equivalent Rate (AER) of 4.10% would generate a profit of £41 over the course of a year.
On the other hand, if the same sum had been invested into gold the previous year, its value would now be £1,319.40, which generates a profit of £249.82, over 144% more than the highest-yielding savings account.
Nationwide Flex Instant Saver
| Savings Account | AER | Value of £1,000 deposit after one year | Profit from the savings account | Value of £1,000 worth of gold after one year* | Profit from gold (after dealer fees) | Profit difference versus gold return (after dealer fees) || --- | --- | --- | --- | --- | --- | --- || HSBC Fixed Rate Cash ISA | 4.10% | £1,041.00 | £41.00 | £1,319.40 | £249.82 | -£208.82 || Nationwide Flex Instant Saver | 3.00% | £1,030.00 | £30.00 | £1,319.40 | £249.82 | -£219.82 || Barclays Reward Saver | 2.41% | £1,024.10 | £24.10 | £1,319.40 | £249.82 | -£225.72 |
3.00%
*Value of gold based on gold price movements between April 2024 and April 2025.
£1,030.00
"Tensions in the global political landscape and trade uncertainties have put the price of gold in a stable position, with experts believing that there has never been a better time to invest in this precious metal," said Rick Kanda, managing director at the Gold Bullion Company.
£30.00
Kanda, however, warned that gold, like any other asset, is subject to fluctuations. "Storage, for instance, typically costs around 0.65% of the gold's value per year (plus tax)," Kanda cautioned.
£1,319.40
Generally, it's recommended that individuals have enough emergency savings equaling at least three to six months' worth of income in an accessible account before investing. For guidance on how much money people of different ages tend to have in savings, check out our average savings by age guide.
£249.82
On the flip side, savings accounts have their own caveats. Many offer attractive AERs and promotional periods but only reward returns if no withdrawals are made. Others limit the amount the interest can be earned on, and while savings are protected up to £85,000 under the Financial Services Compensation Scheme (FSCS), returns might be taxed depending on your income bracket.
-£219.82
Remember that the past results do not indicate the future performance.
-£225.72
Gold Versus Savings Accounts: The Last Decade
Barclays Reward Saver
One might argue that gold's success compared to cash is a result of the recent market boom. Does gold's outperformance persist over a more extended period?
2.41%
Research from the Gold Bullion Company also examined the profits generated by gold in comparison to cash over the last ten years.
£1,024.10
£1,000 invested in a traditional savings account in 2015 would yield £1,180.84 after a decade, amounting to a profit of roughly £181. Investing the same amount in gold at the same time would leave you with around £2,978 worth of gold now, generating a profit of £1,978, or over 11 times the average savings account profit.
£24.10
Additional Insights:
£1,319.40
- For more than a decade, gold has outperformed cash as a store of long-term value, driven by increased geopolitical risks, central bank purchases, financial market turbulence, and its role as a safe haven asset during inflation, currency debasement, and economic uncertainty[1][2][5].
- Gold's value as a dependable hedge against currency depreciation has been reconfirmed by its performance and investor interest[1][5].
- Holding cash or cash equivalents often yields very low or even negative real returns after inflation adjustment over extended periods, as illustrated by the persistently low U.S. Treasury bond yields and negative real interest rates[1][5].
- Central bank gold purchases and ongoing geopolitical tensions suggest that gold's superiority as a store of value relative to cash is likely to continue[1][2][5].
£249.82
Investing in gold might offer a higher return compared to savings accounts, as evidence shows that gold can generate a profit of over 144% more than the highest-yielding savings account in a year. (HSBC Fixed Rate Cash ISA)
Gold's outperformance compared to cash has been observed over the last decade, generating a profit of over 11 times the average savings account profit for an investment made in 2015.
Gold's role as a safe haven asset, combined with increased geopolitical risks, central bank purchases, financial market turbulence, and inflation, contributes to its long-term success as a store of value, outperforming cash for more than a decade.
