The Difference Between Saving with a Cash ISA vs Saving in Gold

cash isa vs gold

When it comes to saving money, it’s human nature to want to put your money in the safest place possible.

Many people turn to both Cash ISAs and gold as a safe haven. But the numbers show that gold may be a better place to put your money. We put together the advantages and disadvantages of putting your money in cash versus putting your money in gold.

Saving with a Cash ISA

A cash ISA is a type of savings account that a bank or financial institution may offer as a way to keep your savings protected from tax and offer (sometimes) higher interest.

Starting on the UK tax year, April 6th, every UK citizen can put up to £20,000 in a cash ISA. Depending on your bank or financial institution, you may be able to get a fixed-rate interest rate on your savings in exchange for limited access. Or you can get an account that makes it easy to withdraw funds whenever you want.


The main advantage of Cash ISAs is that they don’t cost anything to open and are easy to use. It’s just like a savings account, with a couple more restrictions and sometimes higher interest.

This means that ISAs are low risk – your funds go into a bank account and any interest they gain will be tax free. You won’t need to declare your ISA holdings on a tax return.

The other advantage is that Cash ISAs are protected by the government. First of all, they are protected by the Financial Services Compensation Scheme (FSCS), which means your savings are protected up to £85,000 per financial provider. Second of all, your ISA will have the Additional Permitted Subscription, which means that if your spouse or civil partner passes away, you can inherit their ISA.

ISAs offer several consumer options and can be a good place to start saving money.


The main disadvantage of cash ISAs is that they don’t beat inflation. The maximum interest you’ll make on a cash ISA is 1.26% in May 2020. With inflation at 2%, that means your money is slowly losing value every year.

Not only that, but most cash ISAs are restrictive, which means you can’t withdraw your money – or if you do, you pay a penalty. The restriction is also limited to £20,000 per year, which is the maximum you can contribute in a tax year.


Saving with gold

Keeping your savings in gold is a practice that leads back to the Egyptians in 2500 BC. Since gold has a long history of inherent value, people have kept their savings in this precious metal to protect their wealth in case of economic crises, hedge against inflation and overall protection.


There are quite a few advantages to saving with gold.

First of all, gold returns actually beat inflation. If we take the timeline of 2010 to 2020, we can see that gold increased from $1,113 per ounce in 2010 to $1,520.55 at the beginning of 2020: that’s an increase of 36.6%! That’s a big difference to the cash ISA, where your savings most likely decreased in value. For a low risk investment, gold performs incredibly well.

Second of all, gold has intrinsic value and is a physical asset. Gold has been regarded as a precious metal with inherent value since the Egyptians. It’s an asset that will always remain a store of value. Central banks are the largest gold buyers: this means that governments buy gold to protect their national reserves – further proof that gold has inherent value.

Third of all, there are also tax benefits to investing in gold. Buying gold is VAT-free in the UK and Europe and has been since 2000. Sovereign and Britannia gold coins are exempt from Capital Gains Tax. Since there isn’t a £20,000 limit like Cash ISAs, investors can buy as much as gold as they can afford.

Fourth of all, gold is easy to liquidate when compared with other physical assets. If you use a gold dealer like Minted, your gold is instantly bought back at the best rates – better than the high street.

Finally, gold is an excellent way to diversify your investments. It’s a physical asset that sits outside of the international monetary and banking system. It’s not tied to any bank or system, which means that the world could be falling apart and your gold will still be yours. This huge amount of control means you can buy gold and deliver it to your own home whenever you want. No need to rely on financial institutions: whatever you buy, you own.


The main disadvantage with gold is that the process can be complex: papers being filled out, hours on the phone, research on the best vaults and insurance. On top of that, many dealers require contracts, minimum deposits and charge high fees.

We saw those disadvantages and that’s why we built Minted: to bypass all the complex disadvantages of buying with gold.

By buying with Minted, you won’t have to commit to a contract and you can buy gold with as little as £30. We also offer one of the most competitive prices on the market!

At the end of the day, each form of investment will depend on your situation. We do believe that gold is a better place to keep your savings than a Cash ISA, but once again it does depend on your personal choices and preferences. As always, we recommend doing your research and comparing your options before you commit.

Ready? Open an account with Minted


Araminta Robertson

Araminta Robertson

Araminta is a financial writer and self-professed Fintech nerd. She likes writing about investing, the future of payments and of course, gold.
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Disclaimer: Gold prices can fluctuate over time and may increase and decrease. The Minted App Ltd does not accept any responsibility for any loss caused by information provided on the website. Minted is not an investment advisor and recommends doing research before making a purchase.