An introduction to storing gold
Why you should never store gold at home
Gold prices have soared in the new millennium, and this precious metal is in great demand – especially in times of crisis. Gold bars and coins are sought after by private- and institutional investors alike, to generate wealth, protect against inflation, or as a means of asset diversification. Valuable gold requires proper storage: Physical gold can be stored in different ways, though not all solutions are equally suitable.
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Many investors believe their gold is best stored within their own four walls. And initially, an innovative hiding place may seem a safe bet. However, professional burglars are usually well aware of the common options people choose for storing gold at home, including a home safe, or a hiding place somewhere in the garden. While a safe deposit box at their local bank offers significantly more security, this approach too has inherent dangers which wise investors should never underestimate. Meanwhile, specialist providers with their own high-security vaults offer a highly practical alternative. This article presents an overview of these different storage solutions and their various advantages and disadvantages. You will also learn more about options such as storing gold in collective custody, individual storage, or in a bonded warehouse.
If you have further questions or need advice about gold storage, please feel free to contact us at:
Storing your gold in a secret hiding place
One of the easiest ways to store gold is just to hide it around your home. This has many advantages for owners of gold bars and coins, because this form of storage costs little or nothing and your gold is always within easy reach, which means it can be inspected at any time. But the more family members and friends get to know about this, the greater the risk of incurring a loss – because this kind of temptation simply encourages theft.
Those with gold holdings can be very inventive when choosing a good hiding place at home. One big advantage here is that the surface of gold is very durable, which means it will not tarnish like silver or other white metals. Humidity and fluctuating temperatures are not usually a problem, which is why packaged bars or coins are often hidden inside a freezer, in between the frozen vegetables or ice cream. Many also consider a toilet cistern to be a safe hiding place.
However, a glance at police crime statistics reveals that professional burglars can rapidly locate and loot such supposedly safe storage locations. The same applies to gold concealed in socks, coffee jars, or a so-called “book safe” – a dummy book, or even a real one, with a hollowed-out cavity. In fact, the more unusual your “secret hiding place”, the more likely it is to be discovered by robbers.
Storing gold in your garden
Storing gold in your own garden can also prove tricky as regards security. A hole in the ground beneath your lawn or flower bed, loosely laid paving slabs, a terrace border or a similar cavity are often chosen for this purpose. Yet gold hidden in your garden can be stolen just as easily as gold cached inside your home. And, of course, there is also the risk that neighbours or passers-by may spot you digging.
This kind of hiding place below ground may seem invisible, but metal detectors have long been part of a burglar’s tool-kit and can be used to speedily locate the position of your gold. They can easily search to a depth of 50 – 80 centimetres, or sometimes down to several metres below the surface. It can also be a problem if you then forget the exact storage location, or even worse, if you can no longer even remember that you ever buried some gold. This happens more often than you might expect – as the result of an accident or due to an age-related illness, for example.
Storing gold in your home safe
A home safe can be a good compromise for storing gold at home. However, this does not mean just a lockable cash box. These may offer suitable fire protection for important documents, provided they have the appropriate specifications. However, they will not serve as effective theft protection for your investment gold because they are entirely portable, allowing thieves to carry them off with no need to break them open on site. The same applies to any wall or furniture safes not permanently installed. Even small, flush-fitted safes can be levered away from their fixings without much effort. These are usually stolen as they are and taken away to be broken open later.
To provide the necessary burglary protection, all home safes must be as heavy as possible, extremely stable, and should also be professionally installed. Such safes can cost several thousand Swiss francs to acquire and install – otherwise, a home safe will offer little more protection than a freezer or water cistern solution.
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Gold investors should also remember that a safe cannot always be easily installed in every home. Those models with high security ratings are always weighty and will thus demand an appropriately robust anchor point – something which is rarely possible in a rented apartment. To help you store gold safely, you can learn more about other important home-safe considerations, and read about household contents insurance requirements too, in our article: ‘Home safes are often expensive or inadequate’.
Storing gold in a safe deposit box
Quite understandably, installing a home safe is simply too expensive for many precious metal investors, who commonly choose a safe deposit box as a more viable gold storage option. In such circumstances, they will often consider renting a bank safe deposit box facility. This can seem very practical, given that the local bank is usually quite close at hand. Furthermore, safe deposits are located in bank vaults which would seem to offer a high level of physical security.
However, a growing volume of media reports suggest break-ins involving such safes, which often date back to the last century and do not meet modern security standards, are very much on the increase. The reason is that renting safe deposit boxes to bank customers is no longer part of a bank’s core business. As a result, professional burglars often find breaking in a comparatively easy task – they simply turn up equipped with heavy-duty tools and well-executed strategies to overcome any electronic surveillance.
Beyond physical security, there are other considerations which may make bank safe deposit boxes a less attractive option for storing gold. For example, customers will need to open a bank account in order to rent a safe deposit box. That means details about safe deposit boxes will then be stored alongside any other customer data the respective financial institution may hold. Such data can then be easily accessed by the appropriate authorities should they decide to conduct an investigation into anything they consider suspicious behaviour. And last but not least, customers could be denied access to their safe deposit boxes for a long period of time in the event of a bank failure.
However, it is still possible to store gold with the utmost discretion in a safe deposit box which meets every current security standard. Companies such as Swiss Gold Safe, who are specialist storage providers, offer safe deposit boxes in Switzerland which are entirely independent of banks and precious metal dealers. These modern, high-security facilities are purpose-built for the storage of valuables, allowing both private and institutional investors to store gold coins or gold bullion bars with no requirement to open a bank account. Unlike financial institutions, such arrangements are not subject to any reporting obligations. Swiss Gold Safe also offer a virtually identical service providing clients with bank-independent safe deposit box facilities in Liechtenstein.
Request personal advice about Swiss Gold Safe safe deposit boxes in Switzerland and Liechtenstein.
Storing gold in collective custody
Collective storage is another option for storing gold safely. This cost-effective solution is offered by various providers such as precious metal dealers, larger banks and operators of bonded warehouses. In a warehouse context, the provider assumes responsibility for the management of an investor’s precious metals. Once arrangements have been made to deliver the bars or coins to the bonded warehouse, the owner receives a warehouse receipt for his goods. The gold investment holding is then stored together with other items of equal or similar value.
However, when the owner wishes to sell his goods, he will not receive the items originally delivered. The only guarantee is that the owner will receive back coins of the same denomination or bullion bars of equivalent value. Keeping gold in collective storage will thus suit investors who are primarily interested in purchasing a certain amount of gold units and do not wish to get involved with the actual storage arrangements. Click here to find out more about collective storage and how it differs from individual storage.
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Storing gold in individual custody
Individual storage, also described as individual custody or segregated storage, is an alternative storage concept. Unlike collective custody, individual storage ensures the actual goods originally delivered remain the property of the owner (or the person responsible for the storage arrangements) at all times. To guarantee this, the serial numbers of all gold bars and/or the seal numbers of all gold coins attached to coin tubes and master boxes are recorded so they can be clearly recognised and assigned. If this gold is later stored out, such arrangements will ensure the owner always receives the items originally deposited. Owners can also inspect their precious metals at any time, and bank-independent asset storage can offer other advantages too.
Swiss Gold Safe offers bank-independent, segregated gold storage in Switzerland. All gold is fully insured and stored in modern, secure vaults. There are no quantity or weight restrictions, and while the tenant is responsible for delivery and collection, these too can also be arranged as an additional service. This provision is suitable for clients resident in Switzerland as well as those from around the world. Gold destined for storage can be purchased from an independent precious metal dealer in Switzerland, for example, who can then arrange to deliver the metal direct to a designated storage facility.
Arrange a personal discussion to learn more about individual safekeeping for your gold at Swiss Gold Safe.
Does it make sense to store gold in a duty-free warehouse?
Another option for storing gold securely is to choose individual custody in a bonded warehouse, such as those operated by Swiss Gold Safe. These interim storage facilities can be used for the duty-free storage of all kinds of goods and products. As long as your goods remain within the transit warehouse they are not deemed to be imports, which then means they are exempt from VAT and customs duties. That’s why duty-free warehouses are particularly suitable for storing investment products like silver, platinum and palladium, all of which are subject to VAT when purchased over the counter.
However, gold coins and bullion bars (which are deemed to be investment goods) remain exempt from VAT. Therefore, duty-free storage for gold offers no real advantage. One exception to this is any kind of investment gold that does not fall under the exemption from import tax, such as reissues of historical gold coins. This includes coins such as gold Ducats or Centenarios, which are still issued today bearing the last valid year in which the coin was originally in circulation.
What are the advantages of storing gold in Switzerland?
Depending on whereabouts you live in Europe or the rest of the world, storing gold in Switzerland may seem quite impractical. Yet this nation state offers numerous advantages and enjoys an international reputation as a safe haven for gold. There are many reasons for this, including Switzerland’s political independence, a strong independent currency (the Swiss franc) and the country’s uncompromising protection of personal property. The annual analyses used to create the Human Freedom Index repeatedly rank Switzerland as the freest country in the world. The Swiss nation does not belong to the European Union (EU), nor is it a member of the European Economic Area (EEA). Another favourable indicator is that Switzerland is also the location of the world’s largest gold refineries – to put it another way: There is no doubt the Swiss can do gold!
In addition to the security aspects, maintaining privacy is another fundamental requirement when storing gold. This benefits both Swiss citizens and international clients, which means anyone can store gold with absolute discretion. Private providers such as Swiss Gold Safe do not automatically exchange data (CRS), nor do they disclose client data to official bodies. This means Switzerland has no equivalent “safe deposit register”, as is so common in many EU countries.
Last but not least, Switzerland has an excellent modern infrastructure. Centrally located at the heart of Europe, Switzerland can be conveniently accessed from any direction by train, plane or car. Many of our storage clients try to combine a visit to our secure facilities with a short vacation in the picturesque Swiss canton of Uri.
What are the advantages of storing gold in Liechtenstein?
The Principality of Liechtenstein is another option for the secure storage of gold with an independent provider. Swiss Gold Safe maintains high-security facilities here, with discreet safe deposit boxes for both private- and institutional investors. Geographically, Liechtenstein lies between Switzerland and Austria, which means it is just as easy to reach by public transport as its larger neighbours. Swiss Gold Safe’s vault in Schaan is equipped to modern security standards and has safe deposit boxes suitable for storing gold coins and bullion bars as well as other assets. Client data is equally secure here, and known only to the company.
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Like Switzerland, Liechtenstein is also not a member of the EU, though it is part of the European Economic Area. Economically and politically stable, this small sovereign state of some 39,000 citizens is underpinned by a strong Swiss franc, and has a special status within the European business and financial environment. In terms of its per-capita income, Liechtenstein is one of the richest countries in the world. This independent principality has a mixed political constitution which facilitates direct democracy in many areas – for instance, granting its people the right to a preliminary review via a ‘popular initiative’. The preservation of property rights is closely interwoven with the country’s history, which goes back more than 300 years. These are all very good reasons for storing gold in Liechtenstein.
Why your stored gold should be insured
As a specialist storage company, Swiss Gold Safe maintains reliable high-security facilities, as evidenced by the company’s track record of almost 20 years without a single loss. However, there is no such thing as 100% security, and in many cases the stored assets we protect represent a life savings or a planned insurance for later life. Appropriate insurance is an important essential designed to protect stored gold and other assets in the event of a burglary, or some kind of emergency or natural disaster. Unlike most banks, Swiss Gold Safe offer a package which includes the insurance cover you need.
With individual (segregated) storage, full insurance is automatically provided as part of the storage contract. Safe deposit boxes in Switzerland or Liechtenstein also come with basic insurance, with cover for a sum insured of 25,000 Swiss francs. Given that the client alone knows the contents of their safe deposit box, it is then for the client to decide whether a comprehensive insurance covering the actual asset value is a more appropriate option. Like full insurance cover for individual storage, safe deposit box insurance is also arranged by Swiss Gold Safe, while maintaining the highest possible discretion and without passing on client data.
We would be happy to arrange a personal consultation to provide further details and answer your questions about insurance benefits.
Gold storage costs
You can store gold at Swiss Gold Safe via individual custody, where your precious metals are recorded using bar or seal numbers, or privately in a safe deposit box offering maximum discretion. According to your personal needs, you can choose a custom storage space or the secure compartment size you require. You will not be asked to open a bank account and can choose between a range of different payment methods, including cash in various local currencies, and cryptocurrency.
The cost of segregated storage depends on the value of the goods. With full insurance included, you can deposit gold bars or coins from as little as 0.75% of the storage value – and it becomes cheaper the more goods you have to store.
Overview of the pricing for bank-independent gold storage in individual custody:
| Ø stored value in Mio CHF | Gold / Platinum p.a. | Silver / Palladium p.a. |
|---|---|---|
|
0.1 – 1.0 |
0.75 % |
1.00 % |
|
1.0 – 5.0 |
0.65 % |
0.90 % |
|
5.0 – 10.0 |
0.50 % |
0.80 % |
|
> 10.0 |
on request |
on request |
The annual rental costs for a safe deposit box will depend on the size required. Different deposit-box sizes are available in Switzerland and Liechtenstein, and you can also adjust the sizing of your current requirements at any time. Each safe deposit box includes basic insurance cover with a sum insured of 25,000 Swiss francs. Fully comprehensive insurance can be arranged at a rate of 0.2% per annum of the agreed sum insured value. All insurance contracts are managed discreetly using the safe deposit box number as a reference.
Overview of bank-independent safe deposit boxes in Switzerland:
| Safe deposit boxes category | Inner dimensions (in cm, HxWxD) | Price in CHF (per year, incl. VAT) |
|---|---|---|
|
1 |
5.50 x 26.00 x 48.00 |
513.50 |
|
2 |
8.50 x 26.00 x 48.00 |
594.55 |
|
3 |
14.00 x 26.00 x 48.00 |
918.85 |
|
4 |
33.00 x 26.00 x 48.00 |
2’107.95 |
|
5 (safe) |
44.00 x 35.00 x 30.00 |
2’594.40 |
|
6 |
33.00 x 57.00 x 48.00 |
4’053.75 |
| Safe deposit boxes category | Inner dimensions (in cm, HxWxD) | Price in CHF (per year, incl. VAT) |
|---|---|---|
|
1 |
5.50 x 26.00 x 46.50 |
513.50 |
|
2 |
9.50 x 26.00 x 46.50 |
594.55 |
|
3 |
14.50 x 26.00 x 46.50 |
918.85 |
|
4 |
19.50 x 26.00 x 46.50 |
1’243.15 |
|
5 |
38.00 x 26.00 x 46.50 |
2’324.15 |
Summary of important facts about storing gold
- Physical gold has a high intrinsic value, which is why even small amounts should be stored properly. However, not all available storage solutions offer adequate security protection.
- Storing gold in a hiding place at home or in your garden is fraught with risk. Generally speaking, most burglars already know about such “secret hiding places”.
- Storing gold in a home safe places high demands on the weight and durability of such safe facilities. Installations should always be carried out by a specialist company, which means high acquisition and follow-up costs.
- Bank safe deposit boxes are only suitable for storing gold in certain circumstances. Any safe system should be able to meet modern security standards. Regrettably, this is often not the case.
- Swiss Gold Safe bank-independent safe deposit boxes in Switzerland and Liechtenstein are already equipped to meet, or even exceed, these high security requirements.
- Gold can be stored in collective storage or individual (also known as segregated and allocated) storage. Many clients prefer the reassurance offered by segregated storage.
- Storing gold in the independent states of Switzerland and Liechtenstein is advantageous to national and international precious metal investors alike.
- In the event of an emergency, it is important to preserve your assets properly by insuring your investment gold holdings for their true value. Swiss Gold Safe provision includes insurance cover as part of the storage contract, making safe deposit boxes an ultra-convenient storage option.