Fixed Deposit, Gold or Equity? How to invest for best returns in times like COVID-19

The Covid-19 crisis is not just a health crisis anymore and has turned into a serious economic crisis, worse than the 2008 financial crisis, affecting all of our lives. And, the crisis is most certainly going to have a significant long-term impact.

Therefore, as an investor, you must be wondering what your approach should be, considering that interest rates are historically low, the equity market is highly volatile, and gold is the best performing asset. Here are a few points you can keep in mind that should drive your investment-related decisions with respect to the current scenario: 

  1. Secure your financial goals

In such a testing time, when markets are underperforming, and the pace of economic recovery is uncertain, as an investor, your first job is to secure your financial goals.

You need to slow down a bit and align your investing process as per the market conditions. For example, to secure your short-term financial goals, investing in fixed deposit and other liquid funds are a great option. It will ensure the safety of funds and offer a risk-free return.

For your long term financial goals, you can invest in equity with exposure in both small savings plans like fixed deposit and gold.

  1. Diversify your investment holding

The phrase ‘Never put all your chips in one bucket’ is used widely. When it comes to investments, this means that you should never direct all your investments towards a single asset. Making this mistake will drag your portfolio performance, and your chances of losses are also higher. For example, in the current scenario, equity investment may fetch negative returns, but in the long term, it is important for achieving higher growth.

Therefore, diversifying your investments will help you to balance the risks and generate a stable rate of return. Investing in fixed deposits will help in giving risk-free return over time, and gold will add safety to your portfolio, thus limiting the overall loss

  1. Have a long term view

Your long term investment goal should not change with short-term economic volatility. It is important to continue investing with a long term view.

In such scenarios, the economic recovery is always sharp, either in a V or U shaped curve. And, investors, who have continued with their investments during the market crash, tend to make more money compared to those who stopped investing or keep a short-term view.

Investing in a SIP fashioned strategy helps in achieving rupee cost averaging, thus reducing the cost of investment and overall risks.

Check for the bright spot in the economy and companies that are handling the crisis well. 

  1. Don’t follow the herd

It’s important that you understand the market condition and invest accordingly. If you are not comfortable investing in the current situation, you should refrain and avoid following the crowd.

In such times, it is better for you to park your excess funds in fixed deposits with the highest FD rates and earn a stable rate of return.


In the normal situation, fixed deposits might be the low-yield investment, but in the current, investing in fixed deposits with the highest FD rates is the most sensible decision.

It helps to maintain liquidity and avoid unnecessary losses by making panic-stricken financial decisions. And, when the market revives, it will help to formulate a path to quick recovery of your investment portfolio.