7 Options for Storing Gold Safely
If you invest in gold, you need to consider how to store it. There are benefits and drawbacks to storing your gold offsite versus at your own home.
We’re going to reveal some of the most important basics here to help you make an informed decision. After reading this, you'll understand why so many people choose to store their gold in certified vaults.
First we'll go over the different gold storage options.
1. Home Gold Storage Options Are Flexible
Getting started with gold storage at home is straightforward: Place your gold in any inconspicuous area of your residence, like you might do with a firearm. Don't share this information with anyone besides your loved ones.
Nothing is perfect, and that certainly includes the various options of onsite versus offsite gold storage. Each method has its perks and drawbacks. Home gold storage allows the gold investor to have their physical precious metals on-hand. This can cause real concerns regarding physical space capacity and security. While offsite gold storage may eliminate space and security problems, the gold buyer doesn’t have immediate physical access to their gold.
Home storage for gold could be as simple as a shoebox.
Let’s look at some of the other things to consider about home gold storage versus offsite gold storage:
- Home gold storage is essentially free after the initial cost of buying a vault or other storage vessel.
- You can choose the environment in which the gold is stored.
- You can physically access your gold 24/7.
- Most homeowners or renters insurance policies will not cover loss of precious metals.
- Keeping large amounts of gold in your home may increase your risk of burglaries or other harm.
- Fires, floods, and other natural disasters may cause damage to or destruction of your holdings.
Offsite Gold Storage Services Offer the Most Safety
Finding the right offsite storage for your gold starts with two basic steps. First, search for banks and vault facilities in your area. Next, simply call and ask about their storage options for precious metals. Be sure to ask how their fees for storing your gold are structured.
Offsite bullion storage has advantages and disadvantages versus home storage. The most obvious advantage is that it offers better security for your gold than you can provide at home. Disadvantages include ongoing storage fees, and restricted access to your precious metals assets.
There are three major types of offsite gold storage:
- Retail banks (safe deposit box / bank vault)
- Bullion banks
- Bullion depositories
Each of these options have their own advantages and drawbacks. We'll cover them in order.
2. Safe Deposit Boxes and Consumer Banks
A safe deposit box at your local bank branch provides more secure storage when compared to storing gold at home. It is a logical choice for storing not only bullion, but rare and collectible coins or expensive jewelry. There are some caveats you should be aware of, however.
Gold bar stored in a safe deposit box.
- Convenience (in most cases).
- Security—it's in a bank.
- Only you have the key.
- Only accessible during bank hours.
- Bank does not insure contents or accept liability for loss.
- Limited space.
3. Bullion Bank Vaults
Bullion banks are large banks that participate in the purchase, sale, lease, and lending of bullion. Think of "Too Big To Fail" banks, and odds are that they are also bullion banks. Due to the scale at which they buy and sell gold, they only allow large gold deposits, which must be in bar form.
- Better security than a consumer bank.
- Ability to store large amounts of bullion.
- Unallocated bullion accounts can be nearly instantly settled in cash.
- Only located in major cities.
- Most require a minimum of 1,000 oz of gold to open a storage account.
- Focused only on institutional transactions.
Example of an empty vault.
4. Bullion Depositories
Bullion Depositories are private security companies focused on the storage and transfer of bullion. The largest bullion depositories in the US are Delaware Depository and Brinks Global Services. Some depository services have vaults in other countries, allowing you to store your bullion overseas.
Self-directed IRA custodians use bullion depositories to store bullion for clients. You can instruct your bullion dealer to ship your precious metals directly to the depository, where they will verify it before adding it to your stored holdings.
- Highest security level available. Protecting precious metals is all they do.
- All assets independently audited and insured.
- Able to store any amount of precious metals.
- Storage fees can be higher than other options.
- May require travel to the storage location to have physical access.
- Fees and delays when withdrawing your bullion.
Types of Offsite Bullion Storage Accounts
Bullion banks and vault depository companies offer different storage options for larger amounts of bullion. From most secure to cheapest, storage options include Segregated, Allocated, and Unallocated.
5. SEGREGATED STORAGE
Segregated Storage means that your bullion is kept physically separate from all others. You retain ownership of your bullion. The vaulting service only serves as a custodian. When you retrieve your bullion, it is the exact same items that you put into storage. This personalized bullion storage service of course costs more than allocated or unallocated storage.
- Kept physically separate from any other metals.
- Receive the exact same items you deposited.
- You retain ownership.
- Does not appear on the company's balance sheet.
- Most expensive storage option.
6. ALLOCATED STORAGE
Allocated is the most common type of "you own it" bullion vault storage. Your bullion is kept in a vault with that of other investors. You still retain ownership of your bullion. Again, the storage company is simply acting as a custodian. When you request your bullion, you will receive the same type of bullion, but not necessarily the exact same item. If you stored American Gold Eagles, you would get American Gold Eagles back. They just might not be the same ones you deposited.
People who wish to store large amounts of coins with numismatic value need to choose a segregated account, rather than an allocated one.
- Kept with other investors' metals in a secure vault.
- Receive the same type of item deposited, but not necessarily the same exact item.
- You retain ownership.
- Does not appear on the company's balance sheet.
- Less expensive than segregated, more expensive than Unallocated.
7. UNALLOCATED STORAGE
Unallocated bullion storage is the cheapest way to store physical gold and silver. This makes it the most common type of offsite gold storage. The bank buys bulk bullion bars, then sells fractional claims to the gold to investors. It's easier for the bank to store bunches of 400 oz Good Delivery gold bars than individual amounts. They pass that savings on to investors.
With unallocated bullion storage, you do NOT own the bullion. Rather, you have a claim to a fraction of the gold that the bank (says it) has. The bank actually owns the bullion, and records it as an asset on their balance sheet. Investors are unsecured creditors.Their claims are listed as a liability on the bank's balance sheet. The bank lends or leases the actual gold to make a profit, or uses it to back derivatives.
This means that if the bank or storage company goes under, the gold will be pooled with other assets to pay off secured creditors like bond holders. If there is any left afterwards, you might get a fraction of your investment back.
- Bank owns the gold. It appears as an asset on their balance sheet.
- Investors have a fractional claim on large gold bars owned by the bank.
- Investors usually paid off in cash.
- Cheapest fees, since your claim is simply a ledger entry.
Why Gold Storage Is Important
In the most basic sense, bullion storage refers to the storage of physical gold, silver, platinum, or palladium. Whether in the form of coins, rounds, and bars—they need a place to live. Many people tend to store their gold in their own homes in a vault or other protected vessel. This is undoubtedly an easy way to keep your gold, as it involves no other parties. Plus, the gold is right there at your hands, and you know exactly where it is at all times.
But at-home gold storage isn’t a practical solution for everyone. Many individuals simply don’t have the physical space to store their gold, or perhaps they don’t feel safe keeping gold onsite due to sharing the home with untrustworthy roommates, living in a relatively unsafe neighborhood, or having other security concerns.
Investors with not much disposable cash tend to buy silver instead of gold. The question of home storage becomes far more difficult in that case. Silver bullion takes up 70 times more space than gold bullion. To envision that, imagine storing 70 American Silver Eagles to hold the same value as one 1 oz American Gold Eagle.
And in this increasingly transient society, some folks simply don’t live at one place long enough to spend the time, energy, and money to move their gold from one home to another securely. Meanwhile, many people live in so-called “tiny homes” or even choose to reside full time in their recreational vehicles. For them, storing more than a few ounces of gold is both physically infeasible and can pose a significant security risk with a potentially great financial loss.
Gold and silver coins and bars.
In these cases and many others, offsite gold storage becomes the most practical option. With offsite gold storage, one can buy as much physical gold as they please and then direct the bullion distributor to move it to a gold storage facility—no fuss, no muss.
Many of the nation’s largest gold dealers work with some of the most secure gold storage facilities around. The gold investor can have complete confidence in there being a simple transaction and that the gold they’re storing will be safe in its offsite home.
Making a Decision on Gold Storage
Choosing the best solution is contingent on your unique set of circumstances, your preferences, and your short-term and long-term gold investment strategy. Onsite and offsite gold storage both offer their advantages and disadvantages, as we have shown.
If you decide to store your gold at home, you’ll want to spend every cent necessary to ensure it’s safe. That means acquiring a decent vault, possibly purchasing desiccants and dehumidifiers to reduce air moisture in and around the storage vessel, and potentially subscribing to a home security service and/or buying other home security measures.
Don’t forget to take out insurance on your gold! In other words, don’t go the home route because you perceive it to be the “cheapest” way to store your gold. Many homeowners policies will not cover precious metals without a special rider. Storing your gold at home may prove to be the more costly route—and in many more ways than just financial.
Are you going the offsite gold storage route? It’s best to speak with your friendly gold dealer about this. They can recommend gold depositories they trust and tell you how to get started in making an account.
Some larger bullion dealers will offer precious metals storage in their own vault. There are no delivery charges or transit hazards when going this route. The dealer simply tags your precious metal purchases and moves them into a separate storage vault. Rest assured that so long as you’re working with a reputable gold dealer and dependable gold storage depository, it will be smooth sailing from here.
The bottom line? Gold storage is an absolute necessity for anybody who invests in physical gold. There’s no way around it. Whether you choose home gold storage or go offsite, you’ll need to have a safe way to keep it. Spending a little money to secure your gold onsite or offsite properly will go a long way in protecting your investment. And there’s no better way for a gold investor to sleep at night than to know their precious metals are safe and sound.
Check out all of your gold storage options available at Gainesville Coins by following the link.
Joshua McMorrow-Hernandez is a journalist, editor, and blogger who has won multiple awards from the Numismatic Literary Guild. He has also authored numerous books, including works profiling the history of the United States Mint and United States coinage.
More information on buying precious metals from Gainesville Coins
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