Gold equivalent compound interest rates, 1980 – 2020
Gold interest rates?
When looking for a bank account, most people will look at the interest rate they will be paid on their savings. There are quite a few banks, so it looks like we have plenty of choice, and we assume they are all competing against each other to give us the best rate. However, if you look past the names, you will find that many of the banks are actually the same bank with different brands aimed at various customers. We can quite easily come to the conclusion that all the banks are generally the same, and there is, in fact, very little difference between any of them. Over time, many have failed due to incompetent management or straight-out fraud and have needed to be bailed out by the taxpayer to the tune of hundreds of Billions over the years. All banks work to the same rules and have the same goal of transferring as much of your wealth to them as possible, and our savings are equally at risk irrespective of which one we use.
It’s funny, because it’s true…
Assuming you are of the mind to ignore these facts or are willing to take the risk, you will be rewarded with what is generally the standard interest rate of 0.01% on your savings. That amounts to 10p a year for every £1000.00 you put at risk in these institutions. Even assuming your bank doesn’t fail, this doesn’t take into account the amount you lose to inflation, which totally wipes out any gains from the interest and leaves you with less purchasing power each year than the amount you put in.
If you are saving in order to make life easier for yourself in the future, or maybe you have a long-term goal such as a 10-year savings plan for a deposit on a property, then if the past 50 years are to be used as an example, maybe you should Remember Gold!
UK property has been rising almost every year when priced in pounds because your pounds are destroyed by the inflation caused by central banks creating trillions of new pounds, devaluing all new and existing currency.
But when we look at how many ounces of gold it takes to buy an average Property in the UK, you can clearly see that, when priced in real money (Gold), property prices have fallen because gold holds its purchasing power unlike fiat currencies, which are designed to lose their value.
The table below shows the historical average UK interest amounts you would have earned on your savings, minus the amount you would have lost in purchasing power on your savings due to the destruction caused by inflation. The figure in the Inflation Adjusted Bank Interest Rate column can then be compared to the equivalent compound interest rate that you would have earned if you held your savings in gold over the years up to 2020 in the Equivalent Compound Interest Rate column.
For example:
In 2015, the price of gold was £827.02, so through that year you would have gained 10.98%, and then in 2016 you would have gained 10.98%. 2017 10.98%, 2018 10.98%, and 2019 10.98%, so in 2020 it would have achieved approx. £1392.77 (at the time of writing). Compared to your inflation-adjusted fiat savings, if you had put £827.02 into an average bank account in 2015, you would have gained 1.03% through that year, then in 2016 you would have gained 0.22%, in 2017 -1.56%, in 2018 -1.11%, and in 2019 -0.35%, so in 2020 your £827.02 would have the purchasing power of £812.31 compared to the purchasing power of gold at £1392.77.
Use the slider below to compare the years.
| Gold | Fiat Savings £’s | ||||
Year |
£ per oz |
Equivalent Compound Interest Rate |
Historical Average UK Interest Rate |
Historical UK ‘Official’ Inflation Rate |
Inflation Adjusted Bank Interest Rate |
| 2019 | £999.15 | 18.05% | 1.39% | 1.74% | -0.35% |
| 2018 | £965.84 | 12.97% | 1.18% | 2.29% | -1.11% |
| 2017 | £958.48 | 9.79% | 1.00% | 2.56% | -1.56% |
| 2016 | £761.12 | 16.30% | 1.23% | 1.01% | 0.22% |
| 2015 | £827.02 | 10.98% | 1.40% | 0.37% | 1.03% |
| 2014 | £755.81 | 10.72% | 1.48% | 1.45% | 0.03% |
| 2013 | £1,045.48 | 4.18% | 1.77% | 2.29% | -0.52% |
| 2012 | £1,068.21 | 3.37% | 2.80% | 2.57% | 0.23% |
| 2011 | £860.54 | 5.49% | 2.75% | 3.86% | -1.11% |
| 2010 | £692.33 | 7.24% | 2.80% | 2.49% | 0.31% |
| 2009 | £592.56 | 8.08% | 2.21% | 1.96% | 0.25% |
| 2008 | £451.59 | 9.84% | 5.09% | 3.52% | 1.57% |
| 2007 | £322.39 | 11.91% | 5.55% | 2.39% | 3.16% |
| 2006 | £311.68 | 11.28% | 4.68% | 2.46% | 2.22% |
| 2005 | £284.16 | 11.18% | 4.92% | 2.09% | 2.83% |
| 2004 | £227.56 | 11.99% | 4.56% | 1.39% | 3.17% |
| 2003 | £220.94 | 11.44% | 3.73% | 1.38% | 2.35% |
| 2002 | £196.34 | 11.50% | 3.68% | 1.52% | 2.16% |
| 2001 | £179.59 | 11.38% | 4.64% | 1.53% | 3.11% |
| 2000 | £173.27 | 10.98% | 5.47% | 1.18% | 4.29% |
| 1999 | £161.06 | 10.82% | 4.71% | 1.75% | 2.96% |
| 1998 | £177.56 | 9.81% | 6.33% | 1.82% | 4.51% |
| 1997 | £202.01 | 8.76% | 5.45% | 2.20% | 3.25% |
| 1996 | £248.29 | 7.45% | 4.54% | 2.85% | 1.69% |
| 1995 | £243.42 | 7.23% | 5.60% | 2.70% | 2.90% |
| 1994 | £250.66 | 6.82% | 5.36% | 2.22% | 3.14% |
| 1993 | £239.51 | 6.74% | 5.66% | 2.56% | 3.10% |
| 1992 | £194.75 | 7.28% | 8.19% | 4.59% | 3.60% |
| 1991 | £204.79 | 6.83% | 10.57% | 7.46% | 3.11% |
| 1990 | £214.87 | 6.43% | 13.56% | 8.06% | 5.50% |
| 1989 | £232.71 | 5.94% | 11.96% | 5.76% | 6.20% |
| 1988 | £245.26 | 5.58% | 9.31% | 4.16% | 5.15% |
| 1987 | £272.24 | 5.07% | 9.83% | 4.15% | 5.68% |
| 1986 | £250.55 | 5.17% | 8.65% | 3.43% | 5.22% |
| 1985 | £244.55 | 5.10% | 7.57% | 6.07% | 1.50% |
| 1984 | £269.73 | 4.66% | 7.00% | 4.96% | 2.04% |
| 1983 | £279.89 | 4.43% | 6.75% | 4.61% | 2.14% |
| 1982 | £214.78 | 5.04% | 8.54% | 8.60% | -0.06% |
| 1981 | £227.04 | 4.76% | 8.90% | 11.88% | -2.98% |
| 1980 | £358.65 | 3.45% | 10.50% | 17.97% | -7.47% |
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