Depository storage for precious metals isn’t for everyone, but, then, neither is storing metals at home. Especially in larger amounts.
The choice is more complicated than it might look at first glance. It isn’t as simple as determining if the advantage of more physical security is worth the cost and giving up personal possession.
Here are some of the less obvious considerations when deciding whether secure storage for your bullion investment makes sense…
Insurance is a good place to start. Getting coverage at home is difficult in smaller amounts. It is all but impossible in larger amounts (often $50,000.00 or more). Home insurance is also getting more expensive.
Nothing placed in a bank safe deposit box, including precious metal, is insured.
The total fee storage at Money Metals Depository is currently $490/year for a holding valued at $100,000 – that’s less than half of one percent. (And storing $16,000 worth costs just $96 a year).
This fee includes “all-risks” insurance coverage for the full value. Investors trying to insure the metal at home are likely to pay more for a “valuables” rider and get about half the coverage.
The logistics around shipping and receiving metal can also be a factor. Those who plan to hold the metal a long time and have the wherewithal to handle it, as well as the space to store it, don’t have to worry much.
However, investors who plan to trade will want to think about the cost of shipping and insuring the metal they sell. Those making a larger silver investment need to think carefully about the weight and the space required.
Money Metals Depository clients do not have to handle the metal at all, and there is no cost to ship, either when they buy or sell, at Money Metals.
A $100,000.00 purchase in silver amounts to about 3,000 ozs at current prices. It will arrive in 6 boxes, roughly the size of a shoebox and weighing about 40 lbs each. This is more than a lot of home safes can accommodate, and more than some people will be able to carry comfortably.
Investors should also give their ability to secure the metal at home a realistic assessment. How many contractors or kids’ friends will see the home safe? Are home burglaries a problem in the neighborhood? Is the home unoccupied for long stretches of time?
Burglary, including a home invasion, is a risk. Just ask mining expert Jeff Clark.
Secure storage does mean giving up the control that comes with personal possession, and that is a serious consideration. Due diligence is important, and no firm is automatically entitled to your trust.
Hundreds of clients at First State Depository in Delaware found out that $112 million of their metal was missing. The owner was prosecuted for fraud. Not only was the metal gone, but the insurance coverage was inadequate.
Anyone considering storage should ask the depository for proof of insurance coverage and independent third-party audits.
They should then keep an eye out for the common red flags about which Money Metals constantly warns, especially long delays in getting metal shipped.
To be clear, Money Metals believes just about everyone should have at least some of their gold and silver in their direct personal possession. But storage via a trusted partner like Money Metals Depository can be a highly convenient, inexpensive, and secure way to go.
It all depends on your comfort level and your particular circumstances. For more information, visit this page.
Source: Money Metals Exchange
Clint Siegner is a Director at Money Metals Exchange, a precious metals dealer recently named “Best in the USA” by an independent global ratings group. A graduate of Linfield College in Oregon, Siegner puts his experience in business management along with his passion for personal liberty, limited government, and honest money into the development of Money Metals’ brand and reach. This includes writing extensively on the bullion markets and their intersection with policy and world affairs.
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