Ways of keeping your precious metals safe once you’ve decided to make an investment
One paradox of investing in physical gold, silver, platinum or palladium bullion is storage. "I've bought these coins and bars but need to make sure they're safe and secure" - we hear this concern on a regular basis.
The storage dilemma is the central factor many detractors of investing in precious metals use to dissuade people from buying gold and silver bullion. With a share of stock, or some other financial instrument, you don't have to worry about storing it they say.
Where to safely store your bullion though shouldn't discourage you. However, it's important to understand the different storage options available and the pros and cons of each.
Of course, you must evaluate your personal circumstances to determine the best option for you. There's no perfect option, but as the financial meltdown of 2008 and similar crashes have shown, there's really no perfect investment either.
Continue reading below for some of the most common options for storing your gold bullion, silver coins and other precious metal investments.
**NOTE – This isn’t to be confused with how you should handle coins. To learn more about the right way to hold and care for your coins, read our piece entitled 6 Rules for Properly Handling your Precious Metal Coins.
Common Ways for Storing Precious Metal Investments
At your Home
Storing bars and coins at your home is the one option that gives you complete control and access to your metals. You have the ability to purchase coin and diversion book safes that cleverly disguise your valuables as a book or a can of soda for example. If you have a larger quantity of metals that require secure storage, you can consider a larger safe.
When storing your metals at home, you must be cognisant of theft and natural disaster risks. If you don’t have a fire-proof safe for example, you may want to consider adding that to your list of criteria. Fire and water proofing your secure storage are both good ideas. It is possible to purchase insurance against these kinds of losses but it can be expensive and difficult to obtain.
In a bank vault or safety-deposit box
Another option for storing your metals is a safety-deposit box at your local bank, or in a bank vault. Safety-deposit boxes come in a range of sizes and are relatively inexpensive (…typically anywhere from $50 to $200 per year depending on the size). They’re also secure – theft at a safety-deposit box is extremely rare. Storing in a bank-vault though (…if available) is even more secure.
Of course, storing your metals in a bank vault or safety-deposit box has its disadvantages.
One is access – bank hours are limited so if the bank is closed, you can’t get to your metals. If there’s some sort of bank “holiday,” you won’t be able to get to your bullion until the bank re-opens. And while it’s highly unlikely, the government does claim the right to seize “…any financial instrument” in the event of a national emergency.
(Read more about the 1933 gold confiscation and why it would be much harder for another one to occur in the future)
In a depository or third-party storage firm
Another option for storing your metals is a depository or third-party storage firm. Companies like Brinks, Delaware Depository or Diamond State Depository will store your bullion in secure location for a nominal fee. This is by far the most secure storage method, especially if your holdings are significant. Another advantage is the opportunity to store your gold and silver in a foreign country, which can provide certain tax benefits.
The cons on the other hand are similar to the disadvantages of a safety-deposit box.
You don’t have immediate access to your metals like you do if they’re in your home. To compound this disadvantage, depositories are often located far from your home. While you can retrieve your metals any time you like, you will have to wait a few days before receiving them. You will also incur additional shipping and processing costs if you decide to take physical possession of your gold and silver bullion.
As you can see, there are several options for safely storing your precious metals. The most important thing though is that you make sure they’re stored in a cool, dry place. Excessive moisture and heat can significantly devalue your investments in some cases.
Again, which option you choose depends on a variety of factors, including your reasons for investing in precious metals in the first place. Some prefer the easy access of at-home storage, while others prefer the safety and security of a depository.
Which option you choose isn’t nearly as important as your decision to invest in gold, silver, platinum and/or palladium. Preserving the value of your wealth should be your chief concern…how you will safely and securely store these investments should be your next thought.