October 16, 2009 - Many investors are concerned, frustrated, and even angry about the rate of return provided by savings accounts and certificates of deposit(CDs), and some of these investors are actively searching for ways to earn more on their stored wealth. Savers appreciate the liquidity of bank accounts, and they also understand that storing funds in a secure way, such as in a bank, is important. Lately, however, the trend has been for investors to shift funds from their bank accounts and into other avenues, because our banking system's reputation is growing worse by the day. Almost 100 banks have failed this year, and there are 416 banks on the FDIC's "troubled" list. Since the FDIC refuses to reveal the names of these failing banks, many investors feel that they have no choice but to withdraw their funds and close those bank accounts. Some CD holders have felt anxiety about withdrawing from their CD early because of "penalties" that could be incurred, but many investors fail to realize that these penalties only represent the interest that is lost by cashing out the CD earlier than expected. A growing number of investors have decided to shift their funds into privately controlled commodities. Many commodity prices have registered strong gains during the last few years, as our nation's mainstream markets have buckled under the weight of too much corporate and personal debt. Debt-free investments are becoming more popular as our recession drags on, because many outrightly owned assets can be stored privately instead of by a third party. Gold bullion is one of these debt-free, privately held investment options, and this type of precious metal investment has become the diversification strategy of choice for many worried consumers.

Some investors prefer to invest their funds in a bank account, and today's interest rates for savings accounts average between 0.4-0.8%. These rates could rise or fall at any time, but investors enjoy the liquidity of the account. One-year CDs are fetching between 1.4-1.7%, which is slightly better, but some investors feel locked in by the parameters of this type of account. Gold bullion investments earn no interest whatsoever, so this lack of a guaranteed return turns some investors away. Savvy investors are aware that nothing in life is guaranteed, as the last two years have proven for many of us by means of shrinking portfolios and retirement accounts. Inflation and ever-changing interest rates add the element of uncertainty to bank accounts, as does the FDIC's presently overdrafted bank ledger. Gold bullion products, such as the Credit Suisse bars and American Gold Eagle coins, provide security for cash-heavy investors who fear a complete banking system collapse. Apart from the privacy and liquidity that gold bullion provides, many Wall Street economists believe that the gold spot price will continue to rise during the next few years. As more investors seek a safety net for their other investments, demand for gold and silver bullion could rise dramatically, so investors are encouraged to evaluate their portfolios today to see if gold diversification is a viable option. 

Daily Updates Archive

Jonathan Monroe

Senior Staff Writer - Gold-Bullion.org