[Last updated December 2013]
There are no easy answers as to where and how to store your physical precious metals. It really depends on your circumstances. Having a few 1oz or fractional gold or silver ounces on hand is not a bad idea for cash-flow purposes, but beyond that self storage versus security becomes a critical trade off.
Other than home storage or some other form of discreet self storage there are basically two remaining options. Most owners of physical precious metals have a blend of some self storage plus one or both of the following professional services:
- Safe deposit box
- Bailment service
Storage and transportation are closely related topics. We cover issues around the shipment of purchases from dealers and other sellers below. For information on how to move your existing precious metals portfolio across international borders see our section on Transporting metals internationally.
In this section
Safe deposit box vs. Bailment
The pros and cons are summarized in the table below. One key difference is cost; with the exception of online bailment, a safe deposit box will be cheaper than a traditional full-service bailment provider.
|Safe Deposit Box||Bailment|
|Title & Access By definition this is “allocated” and “segregated” storage. Access can be 24hrs via a key / entry card system.||Title & Access Avoid “unallocated” or “pooled” type bailment as title is transferred away from you (the ‘bailor’) to the custodian (‘bailee’). Access may require making an appointment. However with allocated and segregated bailment you will always be able to take possession within a reasonable period of time.
We make an exception to the “allocated rule” for several online bailment providers due to their substantial benefits for investors. See here.
|Risks Safe deposit boxes have been raided in many countries such as the UK by government agents under anti-terror or money laundering laws. A safe deposit box usually comes with basic insurance and the option to buy additional coverage. Pay outs will not replace the goods lost and will be in local fiat currency.||Risks Low risk. Bailment services are usually located in bonded premises in special trade or tax-free zones. Some bailment services offer guaranteed like-for-like replacement of lost goods, including precious metals.|
|Taxes No special tax advantages. Although it’s worth considering facilities located in precious metal friendly countries.||Taxes Precious metal bailment services are usually located in bonded premises in tax-free zones or in locations to take advantage of precious metal friendly tax laws. Many precious metal bailment providers have partnerships with or are also precious metal dealers themselves.|
|Anonymity Depends on the provider. Typically basic identification such as drivers licence or passport and a verifiable address is required. Some services offer numbered accounts and a degree of anonymity. No record of contents of box are kept. Apart from illegal and dangerous items anything can be stored.||Anonymity Similar identification requirements as opening a bank account. You will probably be required to report your bailment assets to tax authorities. Contents are audited by third-party on behalf of the bailment company. There will be minimum requirements and restrictions on what can be consigned to bailment.|
|Transportation Entirely your responsibility.||Transportation Collection and delivery is integral to bailment services. This usually includes handling customs paperwork and insurance. Many precious metal bailment providers have partnerships with or are also transport and logistics companies themselves.|
Moving your metals
Your requirements to physically move precious metals will depend on where and how you’ve elected to store them. When initially purchasing physical precious metals you may need to ship them within country or across international borders. Typically dealers will handle packaging, insurance and delivery (for a fee). Once in your direct possession you’re faced with either moving your metals personally yourself or employing a professional service such as courier or specialist logistics company.
We leave the challenge of how to securely move metals within country up to your own imagination. For information on moving your precious metals across international borders please see our section on Transporting metals internationally.
If you keep metals in some form of bailment the process of moving them around or having them delivered to a specific location is greatly simplified and less risky. This is a key advantage of bailment. See our section on Bailment for more information.
Shipping coins and small bars from sellers
Many retail dealers around the world take orders from abroad and ship just about anywhere. They will use Fedex or a similar type courier so the package(s) will be insured up until your signature at the delivery point. You may have to pay taxes levied in the origination or destination jurisdiction so choose wisely (see our Taxes section).
Standard terms and conditions are that all taxes, fees and duties are the sole responsibility of the buyer at the receiving end. This applies whether you buy from a dealer or someone on eBay. In our experience we have received a letter in the post from the customs or taxation authorities shortly after a package arrives requesting payment of applicable taxes or duties. Usually the request is for VAT or sales tax as most countries do not levy duties on precious metals imported for personal use.
Note that within the EU, destination country VAT isn’t payable if it has already been paid in the origination country (and vice versa). Some EU dealers offer ways to avoid VAT entirely on intra-EU sales.