Gold Vs SIP: Which investment option yields better returns over 15 years?

Everyone has different investment goals. Some people prefer safety, while others are willing to take on more risk for better returns. Today, we will compare two options – gold and SIP – and see which one might be better if you invest ₹5,000 monthly for 15 years.

New Delhi: If you want to save ₹5,000 every month, there are several ways to invest, like Gold Mutual Fund SIP, Fixed Deposit, and others. The key question is where to put your money so that you get a good return in the long run and also keep it safe.

Everyone has different investment goals. Some people prefer safety, while others are willing to take on more risk for better returns. Today, we will compare two options - gold and SIP - and see which one might be better if you invest ₹5,000 monthly for 15 years.

Mutual Fund SIP

A Systematic Investment Plan (SIP) means investing a fixed amount every month in a mutual fund. This is a good choice if you are thinking of investing long-term and can handle some level of risk.

One big benefit of SIPs is that it uses the power of compounding. That means the returns you get are reinvested, which makes your money grow faster over time.

However, since it is linked to the market, the returns are not guaranteed.
But from past performance, we have seen that SIPs can give an annual return of around 12%.

Gold

Gold has been a popular choice for Indian investors. It is seen as a traditional and safer investment, especially for people who want to avoid market ups and downs.

Gold has also given good returns in recent years, with an average annual growth of 10%. Now, there are also digital ways to invest in gold, like Sovereign Gold Bonds, Gold ETFs, and Digital Gold.

Now, let’s compare investing ₹5,000 every month for 15 years in SIPs and gold.

Investing in SIPs

- Monthly investment: ₹5,000
- Time period: 15 years
- Total invested: ₹9,00,000
- Estimated return: 12% per year
- Total Return: ₹16,22,879
- Total Fund Value: ₹25,22,879

Investing in gold

- Monthly investment: ₹5,000
- Time period: 15 years
- Total invested: ₹9,00,000
- Estimated return: 10% per year
- Total Return: ₹11,89,621
- Total Fund Value: ₹20,89,621

From this, it is clear that investing in SIP can give you about ₹4,33,000 more than investing in gold. However, this depends on how the market performs. At the same time, gold comes with lower returns but also less risk.

Your choice depends on how much risk you are comfortable with and your overall financial goals.If you are looking for higher returns with a little risk, SIP might be a better option. But if you want stability and security, gold might be more suitable.

Many investors choose a mix of both, putting some money in SIPs and some in gold. This way, you can get a balance between the potential for higher returns and the stability of your portfolio.

Before starting to invest, it is important to plan according to your goals, the time you have, and how much risk you are willing to take.