Gold versus cash: which is the better store of value?

If you had £1,000 to tuck away, would you consider spending it on gold?

Investing in gold can feel like a risky business. Like any commodity, the gold price rises and falls, and the circumstances behind this aren’t always within your control.

Tucking your windfall away into a cash ISA or a savings account to keep it safe might seem like the better option. Here it can earn interest, and there is no risk of the nominal value of your cash savings being depleted.

But with inflation running at 3.4%, and the best savings accounts paying no more than 5% interest, the real value of your cash savings might not sparkle quite as brightly once its real spending power is factored in.

Investing £1,000 into gold a year ago would have yielded significantly greater returns than putting the same amount into a savings account, according to research from The Gold Bullion Company.

That might not sound surprising. A gold sceptic could reasonably point out that gold prices have surged over the past year or so thanks to rising turbulence in global markets.

“In 2025, gold has outperformed all major asset classes – thanks not only to its safe haven appeal, but also its liquidity and reserve status,” said Tom Stevenson, investment director at Fidelity International. “With investors looking for alternatives to the dollar and dollar-denominated assets like US Treasuries, gold has become a go-to safe haven again.”

It’s a specific set of circumstances, but many argue that cash is always king.

So over the long term, does gold beat cash as a store of value?

Gold versus savings

Experts from the Gold Bullion Company compared the impact of putting a £1,000 windfall into various popular high street savings accounts for a year, versus investing it into gold.

According to the research, the high street savings account with the highest return in May 2025 was the Fixed Rate Cash ISA from HSBC. An AER of 4.10% would have yielded profit of £41 over the course of a year.

If the same sum had been invested into gold last April, the value would now be £1,319.40. Assuming 3% fees to buy and to sell gold bullion, that means gold would have generated a profit of £249.82, or nearly 144% more than the best savings account.

^{Source: The Gold Bullion Company}

*Value of gold based on gold price movements between April 2024 and April 2025.

“Global geopolitical tensions and trade uncertainty have put the price of gold in a strong position, with many experts believing there has never been a better time to invest in the metal,” said Rick Kanda, managing director at the Gold Bullion Company.

However, he stressed that gold has its own considerations. “Like any asset, it’s subject to price fluctuations,” said Kanda. “There are also practical costs to consider. Secure storage, for example, usually costs around 0.65% of the gold’s value per year (plus VAT).

Generally, it is recommended that people have three to six months’ worth of emergency savings in an easy to access account, before investing. We look at how much people of different ages tend to have in savings in our average savings by age guide.

“On the flip side, savings accounts also come with caveats. Many have enticing AERs and promotional periods, but only deliver if no withdrawals are made. Others cap the amount you can earn interest on. And while your savings are protected up to £85,000 under the FSCS, returns can be low and may be taxed depending on your income bracket.”

It’s important to remember that past results are not indicative of future performance.

Gold versus savings accounts: The past 10 years

Again, it’s reasonable to think that this is an unfair comparison given the last year has been a particularly strong time for gold. Does gold’s outperformance compared to cash hold true over a longer timeframe?

The Gold Bullion Company’s research also compared the profits that would have been made on gold versus cash over the last ten years.

£1,000 invested in a traditional savings account in 2015 would now be worth £1,180.84, a profit of just under £181 in 10 years. Investing that same amount in gold at the same time would have left you with £2,978 worth of gold now; a profit of more than £1,978, or more than 11 times the typical savings account.