Investment in Gold vs. Bank vs. Real Estate – What’s the best option? This a question every investor asks.
It is always a good idea to put your hard-earned money into investments that will help you gain financial independence in the long run. Fortunately, there are many investment opportunities in Pakistan through which you can grow your money.
In Pakistan, most commonly, people invest in gold, banks, and real estate. However, we have seen that people seem to be confused about these options. Some believe that gold investment is the best option whereas others believe that banking is the winner for sure. The same goes for real estate investment in Pakistan.
In this blog, we bring you a detailed comparison of all three options (gold, banks, and real estate) so that you can make a better and more informed decision about making an investment.
We have gathered some similar factors that can be seen in all three options. However, the ratio and influence of each factor differ across the investment options.
| Factors | Gold | Bank | Real Estate |
| Capital Required | Moderate | Little (as low as Rs.500) | High |
| Returns | Moderate | Low | High |
| Taxes | No | Yes | Yes |
| Liquidity | High | Depends on bank account type | Moderate |
| Volatility | Moderate | Low | Moderate |
| Security | Moderate | High | High |
Want to know more about Investment in Gold vs. Bank vs. Real Estate – What’s the best option? Keep on scrolling.
The capital requirement is the amount of money or financial resources you need to purchase a specific asset or an investment—usually, higher capital yields higher financial gains.
When it comes to banks, you need less capital. Many savings accounts in Pakistan can be opened for just with Rs.500. Different savings accounts offer different interest rates in Pakistan. You can add little amounts of money every month to your savings account to get more returns.
For investment in gold, you need moderate capital. For instance, in Pakistan, the current price of 10gm of 24K gold is around Rs. 204,800. In short, you need a fair amount of money to invest in gold.
Note: This price of gold fluctuates every day.
For real estate investment, you need high capital. But keep in mind that with high capital comes higher financial gains. To invest in good projects developed by top construction companies or any property in Pakistan, you may require Rs.15 Lac and above.
Returns are the additional amount that you earn from your investment. Every investment opportunity comes with its set ratio of return.
Banks usually pay lower returns to their customers because the risk involved in banks is low. Even if you are not making additional money, your original investment remains safe with the bank. The banks in Pakistan usually give returns of 6% to 8%.
Globally, gold funds offer 11.43% returns in the last one month and 18.51% in three months. However, this rate fluctuates now and then.
Real estate is one of the most lucrative investment opportunities in Pakistan because it not only gives you a tangible asset but also offers incredible estimated returns to you. To get more about real estate news and trends watch real estate’s top YouTube channels.
And the best part?
Land is one of the few assets whose value always appreciates over time. It means the overall value of your property will always increase.
When you own an asset, you must pay a certain amount to the government for holding it. Every investment opportunity comes with a specific tax bracket. Zakat on an investment property is dependent on the income you are getting from it.
You do not have to pay any tax on gold if you own gold. However, if you are a Muslim and meet the zakat criteria, you will have to pay zakat on your gold.
The bank does not charge you for your principal amount. However, they do tax deductions on the profits that you make with them. For instance, in some banks in Pakistan, if the profit/return paid is less than Rs 500,000, the tax will be deducted at the rate of 10 per cent.
When you own a property, you must pay the property tax in Pakistan. The rate of taxation is 10% for the first year, 7.5% if sold during the second year, and 5% if sold during the third year.
Get to know the difference between zakat on property and property tax.
Liquidity is the ease of converting your investment into hard cash. Different investments come with different liquidity ratios. Some are easily convertible into cash whereas some require quite some time for conversion.
Gold has high liquidity. If you want to sell your gold, go to a goldsmith, and he will convert your gold into cash according to the current rate.
The liquidity of bank deposits highly depends upon your bank account type. Certain accounts yield higher returns, but you cannot withdraw the principal amount from that account. However, you may withdraw cash anytime if you have a simple savings account.
Real estate may have moderate to low liquidity, depending on your property type and current market conditions. Get to know the factors affecting the real estate market.
Volatility refers to the process by which a particular market changes its trends. Some investments come with abrupt changes, whereas some operate in steady markets.
For instance, the volatility of gold is moderate and changes with the price of the dollar. On the other hand, bank profits and real estate volatility is relatively low. Both investment opportunities follow a steady and gradual trend.
One of the most important factors of a good investment opportunity is its safety and security. Always invest in opportunities that are 100% secure and legitimate.
The gold market is full of scammers. Always buy your gold from trustworthy sellers, and do not forget to receive your purchase. Also, make sure that the gold is original. There have been many cases in the past where people have sold fake gold to people.
Another drawback of owning gold is the high chance of robbery. Always keep your gold safe and do not disclose the information to people.
Your money is safe with the bank. Hence the level of security in banks is quite high.
Like gold, the real estate industry is also full of scams. You can easily get into their scams if you are new in this field and you don’t even know how many square feet are in one marla. Also, invest in companies that are renowned and trustworthy.
Also, before investing in any housing scheme, make sure the development authorities of that area authorize the scheme. Avoid the most common missteps while investing in real estate, and enjoy a financially lucrative yet stable and carefree life.
If you want a transparent and reliable real estate company in Pakistan, visit Graana.com today. So, these were some of the most common investment opportunities in Pakistan. You can see that each opportunity comes with rewards and risks.
Many people prefer gold as an investment. It is convenient and manageable. The gold investment returns are satisfactory, making it one of Pakistan’s most common investment ideas.
Likewise, investment banking is prevalent among Pakistanis. Bank investments are feasible for people who want to invest small amounts in the market. Choose the investment that is best suited to your needs. Please let us know in the comment section below if you have more questions.
There is no one-size-fits-all answer to this question because the “better” investment depends on your financial goals, risk tolerance, and investment horizon. Gold has historically been considered a relatively stable and safe-haven asset, particularly during times of economic uncertainty.
However, other investments like stocks, real estate, bonds, or even cryptocurrencies may offer different opportunities for growth and income. It’s essential to diversify your investments to manage risk effectively and consult with a financial advisor to determine what investments align with your specific financial objectives.
Gold and bank deposits serve different purposes in an investment portfolio. Gold is often viewed as a hedge against inflation and economic instability, while bank deposits, such as savings accounts or certificates of deposit (CDs), provide a safe place to store cash and earn interest.
The choice between the two depends on your investment goals. If you’re looking for a low-risk, easily accessible option for your emergency fund or short-term savings, a bank deposit might be better. Gold may be preferable if you’re seeking long-term wealth preservation and protection against currency devaluation.
Again, the choice between gold and equities (stocks) depends on your investment objectives and risk tolerance. Equities have historically offered the potential for higher returns over the long term but come with greater volatility and risk.
Gold tends to be more stable but may not provide the same growth opportunities. A well-balanced portfolio often includes a mix of both assets to achieve diversification. Equities may be a better choice if you’re looking for capital appreciation and are comfortable with market fluctuations. Gold might be a suitable addition to your portfolio if you prioritize capital preservation and stability.
Like anywhere else, investing in gold in Pakistan depends on your circumstances and investment goals. Gold has been a popular investment choice globally, including in Pakistan, due to its historic role as a store of value. It can serve as a hedge against inflation and currency devaluation. However, it’s essential to consider the local economic and financial conditions, tax implications, and ease of buying and selling gold in Pakistan.
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