One often overlooked benefit of sourcing gold through Karatbars is its FREE Vaulting Service for clients who acquire their gold from Karatbars.
Although I urge everyone to keep enough gold at hand to run their household for at least 6 months, there are limits on how much can be safely stored at home, and there are reasons (e.g. the threat of a bank holiday and compulsory bank bailins) why storing gold in a bank safety deposit box is not recommended. There are also reasons why it might prove useful to have some gold vaulted outside of one's home country- as many European refugees discovered during World War 2.
Gold vaults typically charge a minimum monthly charge plus a percentage of the value of the gold being stored- many also require a substantial minimum deposit. To put the value on this Karatbars service compare it to other reputable precious metal vaulting services:
Karatbars Vaulting Fees
FREE: Karatbars offers its clients a Free Vaulting service.
NB: Unlike most vaulting services, Karatbars welcomes small accounts. It also offers a range of free auto-savings plans.
Compare Karatbars Vaulting To:
Storage: 0.12% per year on gold, billed monthly and subject to a monthly minimum $4. An example custody charge (as supplied by BullionVault):
Dollar value of gold: $5,000 | Annual custody charge: $48 | Effective annual gold % rate: 0.96%
Physical gold withdrawal fee
Whenever payment to your linked bank account is not reasonable: 1% (charged in grams of gold).
Where you elect whole standard 400 oz bars: 2.5% (charged in grams of gold).
Where you elect whole standard 100 gram bars: A flat fee is charged when you place a withdrawal request. This will typically be around 1% of the value of the gold (plus 2-5% for insurance and transport). See the current flat fee price.
Where non-standard sizes apply: 7.5% (charged in grams of gold). The minimum withdrawal is 50 grams.
Changing your linked bank account
BullionVault reserves the right to charge you an administration cost of up to $50 for changing your linked bank account.
Time and materials billing
$100 per hour or part thereof.
BullionVault reserves the right to charge for exceptional work which falls outside of the normal scope of our business.
Examples : Administering accounts through Divorces, Litigation, Dissolving a Trust, Corporate Account Liquidation.
Password resetIf you are unable to reset your password online and require assistance over the telephone the following charge will apply.
Flat fee : $20
Repeated small deposit surchargeWe welcome small deposits – which customers usually make to perform a bona-fide test of our system, and we welcome regular deposits (for example by standing order) from customers who wish to implement a savings plan.
However we do not welcome repeated small deposits which cost us disproportionately in banking fees. If we receive more than 4 deposits in a calendar year which are each below $100 we reserve the right to redeem the cost to us in banking and internal administration. We will not make this charge before advising you by email that we will do so and giving you the opportunity to stop the repeated small deposits.
We also reserve the right to bounce, at your expense, ongoing repeated small deposits.
Storage: 0.385% (38.5 basis points) and subject to a monthly minimum of $35.
Physical gold withdrawal fee: N/A
Louis Palafoutas, a gold bullion trader with Morgan Gold who has spent three decades in the gold industry, says while some buyers choose to keep gold in a safe in their homes, others ask to have accounts set up at Brink’s or Delaware Depository, where the Comex and the Internal Revenue Service keep their gold.
“It goes from one extreme to the other,” says Palafoutas. “Some want gold delivered to an account they control, like their IRA. Then you’ve got the other extreme: People who are anti-government, who want to have gold in the event of gloom and doom, and they want it in small units because they believe they’re going to be buying groceries and gasoline with it.”
On April 1st, 2015, Chase bank in the US advised clients who rent safe deposit boxes from them that there would be some changes in their policies. Of particular interest is the following condition:
“Contents of box: You agree not to store any cash or coins other than those found to have a collectible value.”
So if gold is a HEDGE, it is during a crisis. The risk of being able to get to a safe deposit box in a crisis diminishes greatly.
During the banking crises in both Cyprus and Greece, there were times when the banks shut their doors to customers. Not only did they prevent them from getting their money, they also refused them access to the vaults and their safety deposit boxes. This was not illegal. They were well within their rights. And there’s nothing stopping that from happening in the USA and every other country in the world.
The same applies if the bank goes bankrupt. Banks seem to follow a law that applies only to them, and there is nothing to stop them from separating you from your box. They can also close for maintenance, or go on holiday if they like. Basically, if they decide to shut the vault and cut off access to your box, they can, and there’s nothing you can do about it.