Our previous article about precious metals caused a strong response and we received many different questions. We decided to dedicate this article to handling the questions we have received so far and to help you better understand all the opportunities you have when purchasing precious metals.
Question: Can I have multiple vaults?
Answer: yes, once you complete KYC and your account is activated, you can create different vaults, for example, for you personally, for you as a couple, for your business or company.
Question: Do I need to purchase fixed quantities of metals, like ounce, gram, kg, bar?
Answer: No, you can purchase any quantities you like, starting with just 1 Euro/ GBP/ CHF/ USD.
Question: If I do not purchase a complete bar or coin, how is it ensured that I really own the metal I purchased?
Answer: Every transaction is registered and you become a co-owner of a bar with the metal quantity you purchased. From 1g of gold or from 20g silver you can ask for physical delivery of the metal to your home, if you would like to be 100% sure of having your purchased metal. In this case, form and shipping costs apply.
Question: What are the costs if I purchase the metal via your partner?
Answer: One of the biggest advantages of buying, storing and selling metals via our partner is the costs. The metals are purchased and sold based on the spot prices (our partner is member of LBMA). At the purchase there is a certain handling fee charged (already incorporated into the purchase price). Thanks to our agreement, customers coming from Singabiz enjoy a life-long discount of 20% on handling fees (compared to opening the same kind of account with our partner directly). And if your vault value increases above 250.000 CHF, the discount automatically increases to 45%. When selling your metals, there is no handling fee charged (contrary to many other similar companies on the market). There are very minimal storage fees which vary depending on the value of your vault. By saving the VAT on the purchase you cover already the storage fees for many years ahead. Storage fees are also subject to the discount mentioned above, if you open your vault via our link as a customer of Singabiz.
Question: What’s the benefit for me to store my metals in your duty-free storage area instead of getting my physical metals at home?
Answer: There are several benefits:
- You do not need to take measures for your home to be suitable for storage of precious metals (purchasing a safe, looking for an insurance able to ensure the metals stored in your home etc.)
- You do not need to pay VAT when purchasing white metals (silver, platin, palladium). As long as the metals are in the duty-free storage area, the VAT is void. But if you wish the metals to be delivered to your home, your local VAT will be charged. Depending on your home country, this represents savings of around 19-25%
- The storage area is highly secured and the metals are insured to 100% of your vault value
- You can easily sell the needed quantity of your metals at any time when they are stored in the duty-free storage area (again – VAT-free). Keeping them in your home, you need to find a buyer close to you, if you would like to sell them, and the price might be completely different (mostly at your disadvantage)
- Selling the metals from the storage area, you always can sell the exact quantity you need for a certain amount of money. Selling them at home, you can sell only the fixed quantity, which was formed for you at the delivery, even if you do not need the total value of the coin or bar.
Question: where can you deliver physical metals?
Answer: there are around 60 countries worldwide, including all EU countries, USA, Canada, Australia, Brazil, China, Hong Kong, Mexico, Thailand – just to mention few of them.
Question: are there any restrictions regarding my residency if I would like to open an account?
Answer: yes, there are some restricted countries and territories. The list is changing depending on different conditions. Normally, if you reside in a country to which physical delivery is possible, you can open an account. Else, just ask us and we’ll check for you with our partner on an individual basis.
Question: Is it possible to buy the metals in one currency and to sell them in another one?
Answer: you can buy and sell precious metals in 4 different currencies of your choice: EUR, USD, CHF, and GBP
Question: What if I move from a non-restricted country to a restricted one? Can I keep my account with your partner?
Answer: It depends. If your only residence will be in a restricted country, most probably, your account will be cancelled. You then can ask for physical delivery to you (before your relocation), sell the metals, or transfer your metals to another suitable location. If you have an option to keep a compliance address in a non-restricted country, you might be able to keep your account.
Question: why are precious metals better than stocks or securities?
Answer: we partially handled this question in our original article. Overall, one should never put all eggs into one basket. The same applies to precious metals as well. Precious metals have their clear advantages (and disadvantages) over stocks or securities. The most important points here are:
- Depending on the country of your residence, precious metals are taxed differently. For example, in Germany they are tax-free if you hold them longer than one year. For profits in your stock exchange portfolio, you pay up to 25% taxes. In other words, your stock exchange papers should perform up to 25% better than the price development of precious metals just to keep parity with them. And that’s year over year in a long-term perspective
- Apart from short-term price fluctuations caused by many different factors, like momentary industrial demand, buying or selling activities of big actors on the market, like Central Banks etc., precious metals have a very stable value, especially compared to other investment opportunities, like stock exchange
- If a company issuing stocks goes bankrupt, its papers can cause losses of up to 100%. Such losses are extremely unlikely to happen with precious metals
But you definitely should diversify your wealth into different baskets, like precious metals, stocks, currencies, real estate etc. Precious metals are just one part of your wealth management, even though a very important one to give more long-term value stability to the whole portfolio.
Question: In case there would be a new prohibition of gold possessions for individuals or businesses, how would be my precious metals protected in your duty-free Swiss storage?
Answer: In the past there were many different prohibitions of possession of precious metals or of trades involving precious metals. For example,
- in France: during the period of Louis XV, during the French Revolution, 1936-1937
- in Germany: 1914 – 1923, 1931 – 1945, 1945 – 1955
- in UK: 1966 – 1971
- in India: 1963 – 1990
- in the USA: 1933 – 1974
- in the Soviet Union: 1918 – 1987
- in Poland: 1950 – 1989
- in China: 1949 – 1983
As you can see, the prohibition of individual possession of precious metals happened rather often in the recent past. Looking at the circumstances when the prohibitions were introduced, you recognize that they usually happened during tough times for the government. Logical consequence: this might happen again, even though we do not have a crystal bowl to look into. We live again in tough times. During all those times the physical metals in the possession of individuals could be confiscated. It is the easiest approach: house search for precious metals and their confiscation. But if your metals are located in a different sovereign state, it will become more complicated, if at all possible, to confiscate them. And exactly this is the case if you store your metals in the highly secured duty-free area of our partner in Switzerland: even if legally you may not hold any precious metals in your home, this restriction probably could not be imposed to a storage in a foreign country. And even if a government would come to an idea to prohibit metal vaults in foreign countries to its citizens, it would be very difficult to execute it. Unsuccessful attempts happened in the past, for example, in the USA.
Question: Can I arrange a savings plan for me or for my kids?
Answer: Yes, absolutely. With the low starting point of just 1 EUR/ USD/ GBP/ CHF per transaction, you can start a savings plan starting from this low amount on a regular basis, e.g. with payments happening once a month, once a quarter, bi-weekly, weekly etc. You can change the frequency and the invested amount any time at your convenience. The process would be: you make a standing order from your bank account (should be in your name) to the account of your vault (there are different account numbers in your vault depending on the currency you prefer to use). And in your metal vault you make a standing order to execute the purchase of a certain metal for a certain amount at a certain point in time. Just consider a couple of days for the money arrival from your bank account to your vault account before the purchase can be executed. Important to keep in mind that the accounts in your vault are for metal transactions only and you cannot just keep money on them for eternity. If you do not execute a purchase within 40 days, the amount will be transferred back to your bank account.
If you have any questions which were not answered in this article, please do not hesitate to contact us. You can also book a short consultation of 15 min. free of charge or reserve a longer consultation for just 150 euro (ex. VAT). Our team or our partner will be glad to assist you.
