Storage costs

[Last updated October 2017]

Assuming you don’t keep your metals at home or buried somewhere you will incur storage costs to maintain your physical precious metals investment. Safe deposit boxes are popular for smaller portfolios. One box in your home country and another in a foreign precious metal friendly country is a very common strategy.

Traditional full service bailment was once the preserve of the very wealthy and limited to holding LBMA Good Delivery bars or substantial quantities of coins. Nowadays investors have the options of relatively cheap and highly convenient online bailment services, as well as very cost-effective traditional bailment for coins and small bars such as for example the Kitco Canadian Allocated Storage or the Perth Mint Allocated Depository Program.

In this section we review the storage costs of some of these options.

Safe deposit vs. Online bailment

The table below compares total one-year storage costs for various quantities of physical gold and silver metal. We look at three safe deposit box facilities Certis (Singapore), Das Safe (Vienna) and Metrosafe (London) and the three online bailment services BullionVault, Goldmoney, and Gold Republic. Figures are based on 2017 information[1].

A significant quantity of gold can be stored much cheaper in a fairly compact safe deposit box than at any of the three online bailment services. Certis in Singapore has the most competitive prices overall.

Where online bailment definitely comes out ahead is in storing large quantities of silver. For 4,000oz silver in our example below, a quite large and expensive box would be required to contain this 124.4kg (274lbs) of metal. For this amount of silver Goldmoney was the cheapest storage option.

1-year price (2017)  To store Certis  Das Safe Metrosafe Gold Republic BullionVault Goldmoney[2]
Gold 10oz $129 €470 £150 $62.50 $48.00 $15
100oz $199 €560 $625 $150 $150
500oz $269 $3125 $750 $750
Silver 400oz $269 €560 £150 $80 $96 $39
4000oz $749 €1010 £1422 $800 $384 $312

This analysis is for one-year’s worth of storage only. It ignores transport logistics and taxes. Both of which tend to be cheaper with bailment. As well buy/sell premiums with online bailment services tend to be significantly lower than buying physical items from traditional dealers (see our section on Bailment premiums).

On the other hand, if you already own coins or bars then, apart from transportation issues, there is no additional cost to putting them into a safe deposit box. To put the equivalent into the online bailment services discussed here you would have to sell the items, put the cash into your bank account, transfer to your online bailment account and proceed to buy metals again[3]; clearly an expensive route, not to mention the hassle.

Of course, cost is not everything as discussed in our section on Storage. In our section on Bailment we point out the importance of “allocated” versus “unallocated” bailment and how online bailment services occupy a grey area between these two concepts. It’s worth noting too that as prices of precious metals rise so do the costs of online bailment storage.
 

 

Traditional full-service bailment

The table below highlights five popular full-service bailment companies. This is by no means an exhaustive list nor is it a list of recommendations. What this sample shows is the variety of additional fees and overall higher costs compared to either safe deposit box or the three online bailment services highlighted above.

However, the critical advantage over safe deposit boxes and online bailment services is the higher degree of security from having specific coins and bars allocated in your title and physically segregated from other clients metals. In addition, traditional full-service bailment is fully insured and designed specifically to allow your metals to be released from safekeeping and delivered to you at any time. Of course all of this reduced risk comes with higher costs.

Note: based on 2014 information.

Company Storage and related costs
Miles Franklin Precious Metal Storage Program

(United States)

Minimum monthly fee of US$39. One-time set up US$89. Minimum US$15,000 first transaction. Shipping & fabrication fees apply (unknown). May consign metals already owned by customers. No online services for customers.
Kitco Canadian Allocated Storage Program

(Canada)

0.65 – 0.85% annually. Minimum monthly fee of C$50. Transfer in fee C$35, withdraw fee C$75. No fabrication costs as only stores coins and bars. Shipping fees unknown. Limited online services for customers.
Perth Mint Allocated Depository Program

(Australia)

1% for gold and 1.9% for silver annually. Fabrication fees from A$250 to 5%. Minimum first transaction A$5,000 Aus/NZ residents or A$50,000 rest of world. Minimum subsequent transactions A$5,000.Collection in person or delivery from the mint is possible (fees unknown).
AmsterdamSafe

(Netherlands)

0.75% for gold and 1.25% for silver annually. Deposit and withdraw fees €42. Fabrication and shipping fees unknown. Minimum first transaction €7500. Transfer of existing metals is possible.
Gold Made Simple

(United Kingdom)

Gold 1% annually. Minimum £90 annual storage fee. Transfer out minimum fee £120. £240 for an individual audit of account. Fabrication and shipping fees unknown

 

Notes:

[1] Based on gold US$1,250/oz and silver US$20/oz. Boxes range from 13 x 13 x 60cm to 36 x 30 x 48cm (approx). Gold Republic storage for gold 0.5% and for silver 1.0%. BullionVault for gold 0.12% for silver 0.48% with minimum charges of US$4 and US$8 respectively. Goldmoney: For gold 0.12 to 0.22% depending on vault. Can pay in gold grams or currency. For silver 0.49% or 0.39% for balances >50,000oz. Can pay in metal grams or currency. Credits for account activity can be used to offset storage fees.

[2] PRECIOUSMETALTAX.com will receive an affiliate commission if you open a Goldmoney Holding and buy precious metals within 30 days of you linking to Goldmoney through this website.

[3] Insurance is another cost not accounted for here. The online bailment services are all fully insured whereas safe deposit boxes typically have very low insurance pay outs, though many offer options to buy additional coverage. Precious metals are a form of insurance so it’s a personal decision just how much you want to spend ‘insuring your insurance’.