Gold storage
How to compare gold storage options and find a secure solution that works for you.
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Considered to be one of the more stable financial investments in modern times, gold is never far from being the metal of the moment. But once you've purchased a few blocks of this precious metal, how do you go about keeping it safe?
Use this guide to get clued up on how to choose the right type of gold storage for your needs.
What is gold storage?
If you choose to invest in gold, you'll need somewhere to store it. A gold storage facility is one that provides a safe place for you to keep your bullion, eliminating the need to worry about its whereabouts.
Outside of your home, there are two main ways you can store gold: in a safe deposit box or with a bullion dealer.
Where to find gold storage in Australia
A quick Google search should reveal a number of gold storage options in your local area. Here are a few that, at the time of writing, had received plenty of positive reviews from gold owners:
- Guardian Vaults. Operating in both Melbourne and Sydney, Guardian Vault offers a private safe deposit box storage facility for your gold.
- Perth Mint. Based in Western Australia, the Perth Mint buys, sells and stores gold securely.
- Custodian Vaults. Custodian Vaults is one of the largest gold storage facilities in Sydney offering private safety deposit boxes.
- Fordis Vaults. Fordis Vaults is a Melbourne-based high-security gold storage facility.
What are my main options for storing gold?
There are several different ways you can store your gold. Here's a quick overview of how each type of storage facility works:
Safety deposit box at the bank
If you'd like to keep an element of privacy with your gold, you can opt to deposit your bullion into your own safety deposit box at the bank. To do this, you simply fill in an application to rent a safety deposit box at your nearest branch. However, as banks continue to move out of the gold storage business, this type of storage is becoming trickier to find.
Safety deposit box with a private company
Opting to open a safe deposit box with a private company has the same advantages as a bank deposit box. Except for this time, there's no connection with the – potentially – unstable banking system.
Working with a bullion dealer
Most bullion dealers across Australia also offer storage facilities. A bullion dealer is someone who usually buys and sells gold, but may also have a storage facility too. Your dealer will take care of the delivery, storage and trading of the gold, lessening the risk of transporting bullion.
Bullion dealers offer two different types of storage. These are:
- Allocated. Instead of being put in a pool of other people's gold, you will have specific bullion allocated to you. This tends to be more expensive than unallocated storage.
- Unallocated. Your bullion is pooled with other people's gold, and you'll be owed a specific amount of gold. You won't receive the exact same bullion back that you deposited.
Calculating the cost of gold storage
Once you've decided which storage option will be best for you, you'll need to consider the cost. It's important to note here that there's no industry standard for fees associated with storing gold. So, it's worth comparing a few different companies to see how they can help you.
- Safety deposit box. Generally, choosing to store your gold in a safety deposit box is the cheapest option. This is because the charge tends to be based on the size of the deposit box you need – not what you're putting inside it. Rates start from around $25 per year for a 60cm-long box. Not all services will include insurance, so you may need to try to add your safe box onto your home contents insurance policy.
- Bullion dealer. If you choose to store your gold with a bullion dealer, you'll be charged per ounce of gold that you'd like to store or as a percentage of the gold's total value. For gold, this tends to be around 1% per annum, but this can change depending on the dealer. If you opt for allocated storage, you'll also need to account for fabrication fees which depend on the purity and weight of the bar itself. Bullion dealers usually include insurance cover in their fees.
Working out how much space you'll need
When you choose to store your gold with a bullion dealer, you can deposit as many bars as you'd like. It's only when you are working with safe storage boxes that you'll need to know how much space you'll need.
Every service provider has a different range of storage sizes, so it's best to consult your local branch for precise sizing. We compared a few different companies on the market and found that the following are typically available to rent:
- Small - 7 x 15cm (stores around 15 x 1kg gold bars)
- Medium - 12 x 15cm (stores around 65 x 1kg gold bars)
- Large - 14 x 42cm (stores around 130 x 1kg gold bars)
- Extra large - 28 x 42cm (stores around 250 x 1kg gold bars).
It's worth noting that boxes usually range between 56cm and 70cm long.
How should I compare gold storage options in my area?
Once you've chosen the type of storage you'd like, it's then time to start comparing different companies in your area. As they'll be storing something very valuable, it's important to take time to research different providers near you. Here are some key points to consider.
- Cost. Finding a storage solution that suits your needs and budget is essential. It may be possible to find gold storage options starting from $25, albeit with slightly limited security facilities.
- Convenience. If you'd like to access your bullion regularly, it'll be more convenient to pick a storage facility that is close to your home town.
- Testimonials. Not all gold storage is the same, so it's key to delve into reviews from previous customers to see how the company conducts its business.
- Insurance. While bullion dealers tend to include insurance cover in their rates, you'll generally need to purchase extra insurance to cover your gold if you're using a safe store deposit box facility.
- Regulation. Most private gold storage companies must undergo extensive checks to ensure the safety and legitimacy of their facility.
Always check the fine print
It's also worth taking your research to the next level and delving into the small print of your contract. Gold storage facilities vary considerably when it comes to access, privacy and security. Be sure to check the following:
- Access. Make sure you know how and when you can access and withdraw your bullion. Generally, banks tend to have more limited access than bullion dealers and private safe deposit companies.
- Ownership. Check whether you'll keep possession of your specific bullion or if it goes into an unallocated pool.
- Security. As well as protection from the elements, you'll want your gold to be protected from wandering hands too. Security in gold storage varies from vault security in banks to biometric fingerprint reading and facial recognition in private vaults.
- Privacy. When you choose to rent a safe deposit box, only you will be able to open it and know what is kept inside. To access the box, you'll need to provide certified identification. On the other hand, a bullion dealer will know exactly how much gold you're storing in their facility.
Pros and cons of gold storage options
| Storing your gold at home | Using a safe deposit box at the bank | Using a bullion dealer | |
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How can I meet any other storage needs I might have?
Aside from gold storage, here's a rundown of some of the leading storage providers in Australia:
Frequently asked questions
Where should I store my gold?
While you can choose to store your gold at home, there are lots of security risks in doing so. Also, you may also struggle to get insurance cover. Alternatively, you can rent a safety deposit box at a bank or private company, or contact a bullion dealer in order to store your gold safely.
How much gold can I own in Australia?
There is no limit to how much gold you can own in Australia, and you do not need to declare your stash. You will, however, need to pay capital gains tax if your bullion is worth more when you sell it, compared to when you bought it.
Which is better for investment: 22K or 24K gold?
That's up to you to decide. If you're looking at gold as an investment, then you may prefer to opt for 24K gold. 22K gold is around 91% pure gold, whereas 24K gold is closer to 99% purity.
Bottom line
There are many different ways to store your gold. Some are as easy as going to your local bank, while others involve striking up a relationship with a bullion dealer. What matters is that you understand what each type of gold storage facility can do for you and choose the right one for your needs.
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