Investors should always consider size, accessibility, and safety of storage options.

A growing number of investors are including precious metals like gold and silver in their investment portfolios with greater frequency for a number of reasons. Some wish to use these assets as a hedge against inflation, while others wish to protect themselves in the event of a major financial crisis.

For many, making the decision to invest in precious metals such as gold or silver is a no-brainer. The hard part is determining how to maintain and where to store the metals. Gold or silver bullion bars, coins, and other types of metals can be bulky and take up space. They also need to be protected from the elements, theft, and other costly losses.

When choosing the best storage method for your gold or silver, it’s important to understand the primary considerations that should be taken into account for maximum protection, as well as knowing the types of storage options that are available to you.

Precious Metal Storage Considerations

Size Matters

The physical size and bulk of the precious metals is an important consideration for investors seeking to store their bullion or other forms of metals. Not all metals are created equal. For example, silver is different in composition than gold, and requires more storage space for the same weight of metal. An ounce of silver takes up more space than an ounce of gold because gold is denser than silver.

Accessibility vs. Security

One of the reasons why investors choose precious metals is that of protection in the event of a financial crisis or other emergencies. Therefore, it’s important to be able to access the metals whenever such an event should occur. For this reason, some opt to store their metals at home for ease of access. While this may seem reasonable, using home storage has some risks such as damage or theft. Thus, it’s important to weigh safety along with accessibility when choosing a storage method.

Types of Gold and Silver Storage

Home Storage

Methods for home storage of precious metals have ranged from using home safes to mattresses to holes dug in dirt floors of cellars or backyards. While investors may feel better knowing their assets are close in proximity, there are many risks involved with this type of storage.

The most obvious risk is that of theft. While no one likes to think that a friend, neighbor, or stranger would steal their gold or other valuables given the chance, unfortunately it does happen. And thieves aren’t always caught, nor the stolen assets recovered.

While it may seem reasonable to believe that your home insurance policy would cover the loss of stolen gold or other metals, the truth is that most insurance policies place a cap on the amount of coverage they’ll allow for these types of valuables, and that cap is usually far below the market value of an investment portfolio.

It’s possible to have the insurance company write an amendment to the policy that specifically protects the entirety of your precious metal investments, but much documentation is required. An itemized listing of the valuables must be prepared and they must be appraised to determine the insured value.

Bank Safety Deposit Boxes

Many people view banks as the financial backbone of the country, believing that their safety and storage needs can best be served by renting a safe deposit box at their local bank for storage of precious metals. This can be problematic for a few reasons:

  • While banks typically insure their deposit accounts, they usually don’t insure the contents of customers’ safe deposit boxes.

  • A financial crisis or extended bank holiday can result in inconvenient bank closures which effectively render the contents of your safe deposit boxes inaccessible.

  • Safety deposit boxes are limited in space, which can make it difficult to store large amounts of bullion or other precious metals.

  • Accessing the metals requires the investor to physically enter the bank premises and have the deposit box unlocked. It can be difficult to add or withdraw the metals discreetly.

Professional Third Party Depository Storage Vaults

Private depository storage makes the most sense for many people, especially for investors with large quantities of metal. These storage facilities are specifically designed for the purpose of storing all types of precious metals on behalf of investors and they meet all of the criteria for mitigating risk.

These depository vaults are built specifically for housing gold, silver, and other precious metals. All assets held in these vaults are fully insured, and the facilities are guarded and protected with maximum security.

Investors who wish to monitor their precious metals may be able to do so without leaving the comfort of their homes or offices. These storage vault facilities usually have a web presence that allows clients to set up an online account, log in, and check their assets or transact business. In addition, you don’t have to worry about not having access to your metals on bank holidays or after hours.

Many of these facilities are affiliated with brokers who buy and sell precious metals, making it easy and efficient to invest and withdraw as needed. These companies take care of the entire transaction from purchase to the secure transportation to or from the storage vault. The assets are transported via armored trucks, and the vaults are designed to accommodate large amounts of bullion or other metals in a safe, secure, and controlled environment.

Summing It All Up

Investors who choose precious metals to diversify their portfolio, build wealth, and create a hedge against inflation should be just as diligent in how their assets are stored and their values protected.

By carefully considering all of the advantages and disadvantages of each storage method, investors can help to ensure that their investments will be safe and protected for many years to come.