Gold vs Equity: The Battle of Asset Classes in India
For decades, Indian households have preferred Gold as a primary safe-haven asset. However, with the rise of the stock market and Sovereign Gold Bonds (SGBs), the way we look at gold has changed. This calculator helps you decide which asset class suits your financial goals.
Why Gold via SGB is Better than Physical Gold
If you plan to invest in gold for at least 8 years, Sovereign Gold Bonds (SGB) issued by the RBI are the best option.
- Interest Income: You get a fixed 2.5% p.a. interest on the initial investment amount, paid semi-annually.
- No Capital Gains Tax: If held until maturity (8 years), the capital gains made on the gold price appreciation are 100% tax-free.
- Safety: No worries about purity, making charges, or locker storage fees.
Equity SIP: The Wealth Compounder
Equity mutual funds invest in the stocks of growing companies. Over the long term (10+ years), equity has historically outperformed almost all other asset classes in India.
- Compounding Power: Equity SIPs benefit from "Rupee Cost Averaging" and the power of compounding.
- Accessibility: You can start with as little as ₹500 per month.
Asset Allocation Rule
Most financial planners suggest a **70-80% allocation to Equity** for growth and a **10-15% allocation to Gold** for hedging against inflation and market crashes. Don't pick one—own both in a balanced ratio!