14 min read
Why is digital gold better than Bank deposits?
Subhasmita Behera
Posted on

Our family has a long history of saving money through bank deposits, usually called FDs. Our parents have always encouraged us to do the same because FDs are reliable and will be stable. On the other hand, they don't have a good understanding of the current state of the market in terms of which asset will provide us with a more significant return, what percentage that return will be, and so on. But, given that you belong to a different generation than they do and have easy access to technology and innovations, are you aware that investing in digital gold is a more advantageous option than putting money in the bank?

If you still need to consider it, let me explain why and how this option is better.

Seven primary factors make investing in digital gold appear to be a more advantageous financial decision than putting money in bank deposits.

Higher return: Fixed-income investments (FDs) often offer low and consistent returns. It does not expose the investor to any risk. In addition, it provides a rate of return that is both fixed and guaranteed to be received over a predetermined period. On the other hand, digital gold has the potential for substantially higher returns due to its adaptability to fluctuating and volatile market conditions. It varies with the rate at which the market is trading, and as a result, it offers a higher return than deposits in a bank.

TDS on interest: Investing in digital gold is a better option than investing in bank deposits because there is no TDS, often known as tax deducted at the source, applied to digital gold transactions. On the other hand, according to Section 194A of the Income Tax Act, bank deposits are liable to have TDS on interest, which can be either 10% or 20%, depending on the account circumstances. This provision applies to interest earned on bank deposits.

Protection against inflation: Because of inflation in the market, gold prices typically go up. Therefore, the value of digital gold can be used as a hedge against inflation. However, when the market environment is unexpected, bank deposits might not offer any protection against inflation.

Diversification of assets: Putting money into digital gold helps diversify an investor's portfolio. It eliminates the risk of placing too much weight on a single investment, like equities or bonds.

Easy to manage: Because it is in digital form, it is incredibly easy to manage and handle because it is pretty convenient. You are free to manage your digital gold portfolio from any location globally; however, when it comes to bank deposits, the bank may demand that you be physically present at the branch to provide proof of your identity in specific scenarios.

Liquidity: Because it is easy to trade digital gold and can be converted to cash whenever needed, digital gold offers more liquidity than bank deposits. As there are limits on withdrawals and fees associated with them, bank deposits cannot be converted into cash as quickly as digital assets can.

Security: Most of the time, digital gold is stored in secure digital wallets or vaults. Digital lockers protect these and are a significantly more secure option than depositing money into a bank account. According to some surveys, on the other hand, bank deposits are susceptible to hacking, fraud, and different types of security issues.

Try TaxSpanner Today
TaxSpanner offers an end-to-end tax compliance solutions to individuals, Professionals and Businesses.
... is one of India’s largest and most trusted websites that offers online preparation of accounts books and filing of TDS, GST, individual Income Tax Returns (ITR). Established in 2007, TaxSpanner is based out of New Delhi. Since then, it has grown to build very large customer base in this market segment.