Gold deposits with a broker or allocated storage?

Additional information > Prevailing conditions for value storage in Switzerland and Liechtenstein > Gold deposits with a broker or allocated storage?

Investors holding precious metals worth several thousand francs should consider secure storage arrangements beyond what home safes provide. Meanwhile, some precious metal traders elsewhere are offering customers ‘gold deposit’ or ‘gold depository’ facilities enabling investors to buy physical gold direct from such providers, who then store it professionally. While this storage arrangement initially seems very convenient, it also has some drawbacks.

A gold deposit is an alternative to the classic purchase of gold bars or coins, which allows investors to buy physical precious metal and then store them directly in the respective trader’s vaults. Though this gold is owned by the buyers, they can only inspect it during the process of making a purchase. Many refineries with a direct sales outlet also offer this same kind of purchase and storage option. Such gold deposit providers usually operate outside of the banking system, so the method does offer some advantages over a traditional bank safe deposit box.

Good to know: Gold deposit providers can be deemed financial intermediaries who invest assets on behalf of their clients. So just like banks, their customers are then automatically subject to certain statutory reporting requirements.

Gold deposits: individual ownership, collective storage and costs

From a legal point of view, bars or coins are classified as individual property and therefore do not form part of a provider’s estate if that business should subsequently file for bankruptcy. This effectively protects investors’ assets from any potential creditor attempts to access or appropriate them. This form of gold investment is broadly comparable to the classic purchase of precious metals which are then stored privately. However, the subtle difference with the gold deposit option is that collective custody arrangements apply. This means that purchased items are treated as unsegregated storage and thus deposited alongside other unallocated stored goods.

However, precious metal deposit costs are generally higher than the charges which apply to a bank safe deposit box. Annual fees are usually based on the value of the stored gold, and there can be minimum storage fees which apply to each particular type of metal.

NB: The annual fee for a gold deposit may include a general insurance which covers the entire contents of the vault. So in the event of an insurance claim, deposit customers will receive only a proportionate share of the fixed sum insured. We advise potential investors to seek clarification of this point in advance.

Gold deposit arrangements can only accommodate common investment products

Investors who are interested in concluding a gold deposit arrangement with a precious metal broker, or directly with a producer, should check carefully beforehand whether they can combine their planned new acquisition with their existing investment holdings. Not all providers will allow this, which means investors could be faced with having to consider restructuring their existing storage options too.

The reason for this is that it’s often only certain common investment products: Australian Kangaroo, Krugerrand, Maple Leaf and Vienna Philharmonic gold coins, for example, which can be stored in collective custody. So any more exotic or perhaps historic gold coins must then be stored separately. Furthermore, most traders would find the process of checking and authenticating other bullionfar too time-consuming.

Opening a gold deposit account

The procedure for opening a gold deposit account is as follows: In most cases, a contract must be drawn up before any initial purchase of gold bars or gold coins. As soon as this document has been signed and countersigned by both parties, the deposit arrangement can be activated with immediate effect. Investors then usually buy their products direct from the depository provider, which eliminates any need for special transport arrangements.

A gold deposit can be topped up at any time with further purchases, and there is no need for the investor to attend in person when this occurs. And likewise, stored bars and coins can also be resold again – either back to the precious metal broker or to other third-party investors.

Any deposit withdrawals will usually follow a standard procedure. Depending on the provider, the gold can sometimes be collected in person. Alternatively, customers can have the goods delivered to their home or to some other address. This usually requires special security transport arrangements – especially when there are large quantities or high-value goods involved. This can incur high costs both for the removal of the precious metals and also for the provision of dedicated transport facilities.

Allocated & segregated storage rather than collective storage

While the collective storage of gold deposits offers some advantages over a bank safe deposit box, many investors feel that this arrangement still has too many potential drawbacks. Fortunately, those who harbour such reservations can choose the attractive option of private gold storage in Switzerland – for example, using facilities offered by Swiss Gold Safe. This specialist storage company offers individual safekeeping of precious metals to clients from all over the world. These arrangements ensure the separate storage of individual client portfolios – a segregation which avoids the kind of amalgamated storage arrangements which occur with a collective, unallocated storage option. And regardless of the product or the type of metal, coins or bars to be secured, storage is available upon payment of one annual premium. Our prices start from CHF 1,200, which includes insurance.

Private storage not only facilitates bank-independent storage , it also leaves investors entirely free from individual broker constraints or minimum charges. Thus clients can decide for themselves where to buy their precious metals, and in addition, Swiss Gold Safe is not subject to any reporting requirements or audits by government agencies. Physical precious metals are stored in and protected by state-of-the-art, high-security systems and always remain the property of the client, who will receive back the exact same pieces that were originally delivered for safe keeping.

Thanks to a convenient storage and retrieval service, investors can expand their portfolio or sell their holding at any time – even without having to be there in person. Further gold coins or gold bars be easily purchased from local precious metal broker and delivered direct to our storage vault. For this service, we recommend our partner, Echtgeld AG, for reliable and confidential precious metal trading.

Private safe deposit boxes in Switzerland and Liechtenstein

Swiss Gold Safe private safe deposit boxes in Switzerland or Liechtenstein allow even more privacy. There is a choice of different sizes, with and without weight limits, at an annual rent starting from 512 Swiss francs, including insurance. These vaults are particularly suitable for investors who wish to actively manage stored assets for themselves, and facilities can be adapted to meet custom requirements at any time. Swiss Gold Safe storage is totally secure, independent of banks, and absolute discretion is guaranteed.

The advantages and disadvantages of gold deposit arrangements at a glance:

Gold deposit facilities are offered by precious metal brokers or refineries.
Investors purchase physical gold, which is immediately stored in a collective storage facility within the provider’s vault.
Annual fees are significantly higher when compared to safe deposit boxes.
Storage options are limited to common bars and coins which can be purchased from the provider.
Alternative allocated & segregated storage is available in bank-independent vaults and safe deposit boxes from Swiss Gold Safe in Switzerland and Liechtenstein. WeltkarteEdelmetalle sicher lagern