When Your Savings Account Reaches This Number, It's Time To Invest In Precious Metals

Sitting on a large cash reserve might feel safe, but after a certain point, it could mean missing out on better opportunities. According to GoBankingRates, once your savings account reaches $50,000, it may be a good idea to consider investing in precious metals. Cash sitting in traditional bank accounts, even in savings accounts that earn interest, does not keep up with inflation and gradually loses purchasing power over time. Recent years have also shown just how unpredictable the financial markets can be, with the CBOE Volatility Index spiking to a historic high in 2020 and experiencing less extreme, yet still persistent fluctuations through 2025 as global events caused disruptions and economic uncertainty.

Gold and silver can help protect you during inflation because they can outperform certain other investments, and gold in particular is less tied to the volatility of the markets. For instance, gold slightly outperformed the S&P 500 over the past 20 years, according to Money.com. From 2021 to 2024, it delivered a total return of 33.5% compared to the S&P's respectable 27.9% return. By diversifying with precious metals, investors can protect their portfolios from volatility while enabling them to fetch higher returns.

With the case for precious metals growing stronger, the question for many investors becomes not if they should add them to their portfolio, but how to do it. GoBankingRates recommends opening a precious metal individual retirement account (IRA), which acts like a traditional or Roth IRA in terms of contribution limits and tax benefits, but allows investors to hold physical gold or other approved precious metals. This can be a solid option, but it becomes one more account to manage and can carry higher fees than a standard IRA account, according to BankRate.

Another option, especially for those interested in investing in gold while keeping their number of accounts low, is investing in a gold-tracking exchange-traded fund (ETF) through a standard retirement account. Gold ETFs trade in the market like regular stocks and can provide greater liquidity than the tangible commodity. However, a select few still prefer to invest in precious metals by owning them physically. While this method provides less liquidity and comes with added expenses to store and protect the gold, according to the United States Gold Bureau, it can provide security in the event of a financial collapse. For individuals looking to buy physical gold, buying bars at Costco may be the best option. But no matter the methods for investing in precious metals, it's worth considering to diversify your portfolio.