Which is a better store of value, cash or gold?

In the past year, gold prices have skyrocketed, and the yellow metal's value as a store of wealth is becoming more widely recognized

Can gold outperform cash savings?

Would you buy gold with £1,000 that you had stashed away?

Gold investing may seem like a risky venture. The price of gold fluctuates like any other commodity, and you aren't always in control of the factors that cause this.

It might seem better to put your windfall into a savings account or cash ISA to keep it safe. There is no chance that the nominal value of your cash savings will be exhausted in this case, and it can earn interest.

The real worth of your cash savings may not be as sparkling when its actual spending power is taken into account, though, given that inflation is at 3 to 4 percent and the best savings accounts only pay interest at 5 percent.

The Gold Bullion Company found that a year ago, investing £1,000 in gold would have produced much higher returns than putting the same sum into a savings account.

It may not seem shocking. It would be reasonable for a gold skeptic to point out that over the past year or so, rising market volatility has caused gold prices to soar.

Tom Stevenson, investment director at Fidelity International, stated that gold has surpassed all other major asset classes in 2025 because of its reserve status, liquidity, and appeal as a safe haven. Gold has once again emerged as a preferred safe haven for investors seeking alternatives to the dollar and dollar-denominated assets such as US Treasuries.

Although there are certain situations, many contend that money is always king.

Does gold outperform cash as a long-term store of value, then?

Savings as opposed to gold.

The effects of investing a £1,000 windfall in gold versus putting it into a number of well-known high street savings accounts for a year were examined by experts from the Gold Bullion Company.

The study found that in May 2025, HSBC's Fixed Rate Cash ISA was the high street savings account with the highest return. Over a year, a profit of 41 would be generated by an AER of 4 points 10 percent.

The current value of the same amount would be 1,319.40 if it had been invested in gold in April of last year. With a 3% fee assumed for both the purchase and sale of gold bullion, gold would have made 249.82 percent more than the best savings account.

The Gold Bullion Company is cited.

Gold value based on changes in the price of gold from April 2024 to April 2025.

Rick Kanda, managing director of the Gold Bullion Company, stated that the price of gold is in a strong position due to global geopolitical tensions and trade uncertainty. According to many experts, there has never been a better time to invest in the metal.

Gold, he emphasized, has its own considerations. "Like any asset, its subject to price fluctuations," Kanda stated. "There are also pragmatic expenses to take into account. For instance, secure storage typically costs between 0 and 65 percent of the gold's annual value (plus VAT).

Before making an investment, people should generally have three to six months' worth of emergency funds in an easily accessible account. In our average savings by age guide, we examine the saving amounts of people of various ages.

Conversely, there are limitations associated with savings accounts. Many offer promotional periods and alluring AERs, but they only deliver if no withdrawals are made. Others place a cap on how much interest you can earn. Furthermore, even though the FSCS protects your savings up to £85,000, returns may be small and subject to taxes based on your income bracket.

It's crucial to keep in mind that past performance does not necessarily predict future results.

Savings accounts versus gold: The last ten years.

Again, considering that gold has been in particularly good form over the past year, it is fair to assume that this comparison is unfair. Does gold's superior performance over cash hold true over an extended period of time?

Research conducted by the Gold Bullion Company also examined the potential profits over the previous ten years from gold versus cash.

After ten years, a £1,000 investment made in a traditional savings account in 2015 would be worth 1,180.84, or slightly less than 181. If you had invested the same amount in gold at the same time, you would now have 2,978 worth of gold, which is more than 1,978 times the average savings account profit.