One major mistake often made by first time investors is to store their precious metals in a “safe deposit box” at a bank.
Banks are what many people first think of when it comes to storing their precious metals. A safety deposit box at a bank allows you to store just about anything. For a small fee a bank will store your items safely, where no one has access to them but you.
While there are certainly a lot of benefits to this option, there are also some downsides.
The primary concerns with safety deposit boxes are accessibility and absolute security. If the government happened to order a bank holiday where they could essentially take your gold or silver without permission, there would be nothing you could do.
Storage of precious metals is not part of a modern bank’s role. Storage and transportation of precious metals is a full-time business and this is why one should trust the experts.
When gold is out of the professional storage units, it loses its market integrity and its resale value. When comes the time to sell, the buyer might be worried about the quality of the precious metals if you have them stored at home or with a bank.
Banks are in the business of lending, not storing. So you would worry whether your gold has been loaned out.
Beyond this, “Safe deposit boxes” are susceptable to bank holidays and seizure…
Banks are regulated, and many governments in countries where property rights and the rule of law are not sacrosanct might force the bank to confiscate customer assets. That’s what happened in the 1933 gold confiscation in the US.
Lastly, your safety deposit box is only as secure and trustworthy as the bank employees who can potentially gain access to it.
Remind you that the bank doesn’t insure the contents of a safe deposit box. The safe seposit boxes provided by banks are not FDIC insured or protected from losses as bank deposits are. If you want to feel really comfortable and secure, you have to buy separate insurance, which can be expensive, and it’s hard to get for precious metals in safe deposit boxes.
Finally, size can be an issue. If an investor chooses to make a large investment, the holding could be bulky, exceeding the capacity of the box.
While storing gold and silver at a bank is a sound choice, there are always situations worth considering before you put your investment in any type of third-party storage. To conclude, storing silver and gold bullion in a bank safe deposit box is not a safe, insured alternative for investors.