Gold Versus Cash
If you want your money to work harder for you, the low-interest rates currently offered by banks offer very little in return for your loyalty.
With most interest rates failing to keep up with inflation and counterparty bank risks, many people are turning to gold as a safer, more reliable wealth store than ever before.
The way that banks works has been the norm for decades. Customers save money in bank accounts in return for interest, and the banks are able to use this capital to lend to others in return for repayment fees and interest in borrowing.
Although this system has been effective for many years and has been mutually beneficial for all parties involves, plunging interest rates have seen the deal change for savers who often feel underwhelmed on their returns.
Even banks carry risks
Banks are affected by wider financial markets and political factors too, therefore increasing the risk for customers who have poured their life savings into these established institutions. In fact, should a bank fail for any reason, savers are only protected to the tune of £85,000 per bank which is a major concern for those that have entrusted large amounts to the bank of their choice.
In the US, there has been much talk about interest rates of late as it looks likely that the Federal Reserve will make interest cuts. This is bad news in the long term, with CNN reporting that interest rate cuts are rooted in desperation and bad news long term for investors. Rate cuts mean cheap money but, with jobs growth and economic growth slowing, more debt is on the horizon – and this can only be bad news for investors with US debt already at trillion dollar levels. Should the US fall into recession, many other nations would likely follow suit, putting savings at risk worldwide.
Gaining greater control of your wealth
As a physical asset, gold has an established value thanks to a scarcity that allows it to climb far higher than interest rates. Free from the constraints of financial institutions including banks, gold can be securely stored in vaults, under the guidance of an expert or even locked safely elsewhere thus removing wealth from general circulation and giving back power to the investor on how and when their wealth is used.
Gold has also enjoyed a significant long-term price rise over the last decade and has far exceeded even the best savings account products meaning that investor wealth can work far harder when used to purchase tangible gold.
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