Secure Vaulting for Silver Investments
Arranging Storage for Investment Silver Bars, Coins and Rounds
What Are Storage Risks of Investing in Silver?
Home Storage of Silver Vs Professional Vaulting?
Private Silver Bullion Vaulting or Bank?
Is Silver Storage Secure?
As you’d expect this all depends on where you’re storing your silver! Obviously a specialist vault designated as Ultra-Secure is going to offer better protection from theft than a small local bank’s safety deposit box, which in turn is going to be more secure than a low-cost safe in your home.
You don’t need to be Fort Knox, but if you opt for storing your metals in anything other than a locking and well secured box, such as hiding your silver around your home or burying it in your garden you can face a real danger of having your metals stolen, especially if knowledge of your silver stack becomes public knowledge.
As a silver investor you need to balance the dollar value of a complete loss with the probability of theft, the practicality or inconvenience of location and your speed of access in the case of an emergency.
You need to consider adequate insurance and to try to eliminate third-party risk such as the bank you’re storing with going bankrupt and seizing your banked assets, or a low-cost vaulting company stealing from or defrauding you. It does happen.
When you have the balance right then your silver storage is secure enough for you. Whether that’s secure enough for the next person is another matter, but as with anything security is relative.
Silver Bullion Storage Options
Whilst a growing number of silver investors are “preppers” who like to store their precious metals in hidden caches out of sight and beyond the knowledge of banks, government and institutions, most investors opt for one of five storage solutions:
#1: Specialist Bullion Vault (Non-Bank)
Bullion vaulting facilities offer a specialist and high secure storage service, storing your metals in segregated (held fully separately from other investors metals) or pooled (different investor’s metals are mixed within the vault) vaults.
Specialist vaults typically offer the most secure vaulting at low prices due to vast economies of scale.
They are also well insured, usually by top-tier insurers and hold your metals fully separated from corporate assets, further de-risking your investment in the event of the vaulting company going bankrupt.
Some specialist vaults are also designated as being able to hold bullion assets within an IRA.
#2: Mixed Vaults (Non-Bank)
Mixed vaults hold various high value assets, such as gold and silver, diamonds, cash and artwork.
They can offer similar levels of security and insurance to specialist bullion vaults but have a more generalist user base, and tend to run at a higher cost in fees and service charges than bullion vaults.
#3: Bank Vaults
Larger banks offer a vaulting service which can include bullion storage. Since the banking crisis of 2007/08 and changes to global banking laws, these vaults are no longer considered as secure as they once were – not from external theft, but from internal appropriation.
A bank is now legally entitled to use deposited funds as their own in the event of a bank crisis (a “bail in” as opposed to the government “bail-outs” of 07-07), with only small sums of depositors monies ring-fenced and protected by law.
Before storing large sums of cash or precious metals in a bank confirm what the situation would be in the event of a bank crash.
#4: Safety Deposit Boxes
Either bank or non-bank, safety deposit boxes are good for smaller values of silver bullion and for convenience if the facility is near at hand.
Due to silver’s lower density and lower value per ounce than gold – you need a much larger volume of silver to give an equivalent value of gold.
Because of this safe deposit boxes can be a very expensive way of storing silver. As with bank vaults, for bank boxes it pays to check the situation in the event of a banking crisis.
For non-bank boxes, check for third-party risk – ie does the box company take temporary ownership of the assets vaulted with them and if so what would happen if they were to go bankrupt.
#5: Home Storage
A favorite storage method in the US where bank and governmental privacy is a concern and the legality of gun ownership along with silver and guns being common bedfellows makes many thieves think twice.
Home storage is the top choice for small to mid-sized silver investors working under the mantra “if you can’t hold it, it’s not yours”.
To reduce risk from theft it’s critical that your silver collection is not something that’s common knowledge outside of your immediate family and for any value above 5-figures you must make absolutely certain your safe is professionally installed, adequately insured and preferably well hidden.
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What Are Storage Risks of Investing in Silver?
Silver theft is the principal risk in any storage situation. Whether it’s a sketchy vaulting company, an unhappy employee, or any flavor of home-invasion criminal there are few assets capable of being vanished with the same ease as precious metals.
Once stolen, silver becomes untraceable – either due to silver bullion coins being commonplace or because silver is very easy to melt down and sell as scrap to any number of willing buyers.
The best vaults combat this risk of theft by ensuring all staff are carefully vetted – sometimes with tougher background checks than the military – and foot traffic in and out is subject to multiple layers of testing from metal detectors to z-ray machines set to sniff out the smallest quantities of gold and silver.
Many ultra-secure vaults require a complete change of clothing before staff can enter the facility, wearing pocketless overalls and shoes that never leave an inner security zone, helping to ensure staff are never tempted to share in your wealth.
As for a risk of break in – at the big vaults, compound security is so tight that unknown faces have no chance of getting even close to the building’s entrance, let alone a vault door.
Plus, for those one in a billion chances where any loss actually takes place – there’s bullet-proof insurance.
The Realities of Home Storage
On the other hand, home storage is where silver investment can get riskier. Silver stacks that start small and grow gradually often do so outside of the safety given by a good safe and before you know it there can be a significant value sitting unprotected.
The safe is always going to get bought next month, or when the stack reaches such-and-such size!
Even with a good quality and professionally installed safe, risk is not fully mitigated. Every month we hear tales of home-vaulted silver being stolen by family, friends and acquaintances – not to mention the work of opportunist or professional thieves.
Yes you can buy excellent home safes, and yes you can get your metals insured – but if word gets out that you own a good volume of bullion you could easily find yourself out of silver and your insurance refusing your claim.
As we cover in the next section, if you keep silver at home – don’t tell a soul.
On the flip side of the coin, another major risk is over-secrecy
There are probably billions in dollars of unclaimed bullion sitting in vaults across the globe because privacy conscious investors didn’t tell anyone about their metals.
After becoming incapacitated or in the event of death metals can remain securely vaulted without anyone being notified – especially where vaulting fees are covered by the value of the metal.
And if your estate executors don’t know about your silver, then it’s never going to be passed onto your children and loved ones. The tax man certainly didn’t get his cut, but to all intents and purposes the silver is gone.
Finally a storage risk of more concern to home-storage investors than customers of professional vaults…
Fire and Natural Disasters
Whereas specialist bullion vaults will carry insurance for all possible threats, some events such as fire and natural disasters like earthquakes and tornadoes can be harder to adequately insure against for homeowners.
Gold and silver have very low melting points in relation to other metals and home fires can burn sufficiently hot to turn your precious metals into a mess of charred wood, soil and gravel, held together by a dirty silver blob.
And tornadoes that can pick up cars will think nothing of scattering your bullion across the county.
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Home Storage of Silver Vs Professional Vaulting?
Our recommended choice is always going to be ultra-secure specialist non-bank vaulting as we believe it offers the best security and lowest risk at the fairest price.
Unless your home comes with armed guards, multiple perimeter fences, state-of-the art technology, thick specially reinforced concrete walls and blast-proof vault doors it’s unlikely you’ll be able to match a specialist precious metals vaulting facility for it’s security.
The only real downside to professional silver storage facilities is proximity. If you’re not lucky enough to live close to one, you’re going to be at least a long drive or two-day delivery away from your metals.
This is normally an inconvenience worth living with for the gain in security – however if in a time of extreme national crisis – the type of crisis many silver buyers are considering to be on the horizon – you are separated from your silver, then that inconvenience rapidly becomes a crisis of it’s own.
This is a key reason why many silver investors opt for home storage, or as is most common a mixture of home-storage and secure vaulting.
Mixed Home / Vaulting Storage
Keeping some of your silver investment close at hand could always be considered a good idea even if it’s security is notably lower.
Much as investors like to keep some silver investments for long-term (typically larger bars with low premiums) and some smaller bars and coins for shorter term liquidity, storage can be considered in the same way: long-term secure with allowance for short-term emergencies.
How much you’d plan on keeping at home would reflect your beliefs about either how bad a coming crash could be or your need for emergency liquidity. For example from a $100,000 total investment in silver bullion, an investor may opt to keep $10,000 or 10% at home. In terms of storage space $10,000 may only entail 11 fifty ounce bars and all good quality home safes are insured for at least this sum. A good small metal safe can be secured to your home’s structure and further protected by being hidden inside an item of built-in furniture.
Your $90,000 would remain in ultra-secure vaulting whilst your emergency $10k would see you through most shorter-term eventualities.
Having the full $100k in a home vault would require a much larger and far more expensive safe, professional fitting and would be a lot more difficult to obscure – after all 50x 100oz bars take up quite a bit of space.
It would also up your personal risk considerably as a determined thief who somehow knows you have $100,000 of silver at home, is more likely to resort to bodily harm than they would for $10k.
How likely are criminals to know you have a lot of silver in your home vault? Much more likely than you’d imagine.
When you buy silver for home delivery or locally in a coin store you’re creating a paper trail and a circle of third parties who know you store silver at home. Form a low-paid shop clerk to a disgruntled postal worker, word-of-mouth can spread the circle of those in the the know rapidly.
If you ever post pictures, comments or stories about your silver investments on social media – and we know by the hundreds of YouTube videos showing huge collections arranged on kitchen tables and beds – your collection can easily become a target.
It’s now remarkably easy to trace a home addresses from a social media account either through deduction and sleuthing or by a simple hack – and if you’re even slightly vocal in your liking of bullion you’re only painting a big target on your back.
Family are a risk too. Your children or other half can inadvertently let slip you own bullion whether as a passing comment or a playground boast but word spreads quickly, especially when it’s something so exciting or gossip-worthy as big bullion bars or giant stashes of silver coins!
When word gets out – and it usually does – how certain are you that this rapidly spreading knowledge won’t come into earshot of someone with less honorable intentions.
And if your insurers get wind of the fact that you may know the thief or told them about your silver? You can kiss your claim goodbye.
As a final word, remember this: no matter how well secured your home vault or how fiendishly clever your hiding place, a determined criminal plus the threat of violence to your loved ones can open any door.
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Private Silver Bullion Vaulting or Bank?
Given that we recommend professional vaulting over home-storage for all but the smallest sums, the next choice is to use a private vault (non-bank) or a bank vault.
Banking laws have been changed over the past several years to help dismantle your privacy – both in the name of anti-terrorism and to help the IRS crack down on tax avoidance. We’ve also seen the introduction of new “bail-in” legislation – laws which will see your bank-held assets being legally taken by your bank to pay it’s liabilities in the event of a new banking crisis.
Have the banks mended their ways since the last time they needed money and took billions in dollars from the federal government? Are you happy with all of your holdings, investments and transactions being reported to the powers that be?
Depending on your answers and beliefs, you’re either going to find bank vaulting to be an unacceptable risk, a worrying leak in your rights to privacy – or a perfectly adequate way to store your valuable metals.
With banking law out of the way, the next decision is based on physical security and insurance.
Is Bank Vaulting Adequate Insurance?
Banks hold a lot of cash and valuables, both on behalf of their customers and to partially cover credit and debt accounts where physical cash may be needed. As such most banks have a secure vault or at least a good-sized safe and they may have a number of safe deposit boxes.
These facilities are typically watched over by cameras, security guards and of course the bank staff and tellers.
Although the chances of theft are low, US banks do get robbed and the FBI statistics for 2018 state there were 3,023 separate bank robberies in the year – with 76 specifically focused on bank vaults and safe deposit boxes.
Your bank-vaulted silver is usually adequately insured but with banking crime rising year on year it pays to double check your bank’s policy and watch out for deductions and escape clauses designed to minimize the bank’s losses and their insurance premium costs at your expense.
On the other hand specialist private bullion storage facilities are built from the ground up with the protection of physical precious metals being their sole purpose.
Ultra-Secure Specialist Vaults
Blast-proof, bomb-proof bunkers, sometimes several floors below ground and protected behind multiple layers of armed personnel, impenetrable physical barriers and high-tech security these vaults are designed to keep national, corporate and generational wealth free from all risks.
The very best of these specialist vaults are considered safe enough to be used as a depository by the IRS. This means they must pass key tests to allow them to store the silver and gold held within tax-advantaged IRA plans.
Despite these much higher levels of security, storage for silver in one of these facilities is broadly comparable and often at a lower cost than bank vaulting – thanks to the economy of scale the bullion vaults operate at and lower insurance rates due to special deals with tier-one insurers.
In the same way as we see there being little real choice between home storage and vault storage, when it comes to bank vaulting vs non-bank vaulting specialists the choice is obvious.
Bank vaulting does not come with sufficient safety from theft (institutional and otherwise) or degradation in privacy to match private vaults – and with both being available at more or less the same annual cost or fees, we have to swing towards private.
What gives private vaults that final nudge, is that professional silver investment companies like Goldco can have deals with their favored vaults where qualifying clients pay zero vaulting fees – making the decision a true no-brainer.
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Is Silver Vaulting Insured?
Vaulted silver, whether it’s held at your bank or inside specialist bullion storage facilities, is always insured.
Whether it’s adequately insured in your mind, will depend on the specific policies the silver vaulting service uses – so it pays to always check insurance details both for any deductions or excesses, how the total sum insured tracks the price of silver and what the insurance covers, from fire, to theft and to acts of God, war or terrorism.
You’re much more likely to find insurance issues with bank vaulting, and non-bank safe deposit services, than with specialist bullion vaults.
The insurance policies of specialist bullion vaults and storage depositories will typically be underwritten by equally specialist risk underwriters operating through top-tier market movers in the international insurance market, such as Lloyds of London.
The best policies commonly cover “all risk” with the specific metals being covered against physical loss, damage or disappearance. Policies tend to max out at $50million for any single loss at a single location so if you have sums vaulted greater than this, it’s essential to spread your risk across more than one facility.
In much the same way as good investors spread risks by diversifying assets and hedging, any large vault holding should be split both geographically and in terms of the company vaulting the metals to further de-risk against natural and geopolitical events, to bypass insurance limitations – and issues (no matter how unlikely) with the individual vaulting companies themselves.
What Makes a Good Silver Storage Facility?
A good silver storage facility reduces the risks of investing in silver, provides a straightforward and transparent service, responding to your requirements and needs quickly and efficiently – and all at a cost-effective price.
Risk reduction is taken care of through:
- Physical security – the vaulting structure, and it’s defenses against theft, from bomb-proof concrete to state-of-the-art surveillance all help keep your metal where it should be. Most ultra-secure vaults could shrug off a small war and one bullion vault has famously withstood a nuclear bomb blast!
- Personnel security – carefully vetted staff, both on-site from armed guards, to security-focussed vault technicians and offsite monitoring staff watch for suspicious activity. By studying camera feeds, alarm trips and hunting out digital vulnerabilities that hackers could use to access key systems, staff remain ahead of any threats. Well trained office personnel can even spot when a customer is under duress, such as if they are removing silver from their vault under threat – and so help contact the authorities to avoid a crime.
- Geographical security – the vault being distanced from known danger points such as earthquake or tornado zones, outside of high crime states and within close proximity to law enforcement teams helps eliminate obvious risks.
- Insurance – having adequate specialist insurance is essential in the unlikely case any aspects of the site’s security fails. Insurance should fully track values and allow for a like-for-like replacement with zero personal losses in the event of a claim.
- Clear storage fees and pricing – with no complex small-print or unexpected extras which push fees up higher than anticipated.
- Well trained staff – who are able to answer any questions, either from direct customers or service intermediaries. When it comes to your investments, the only answers you get should be straight answers.
- Robust Privacy – transparency should not be at the expense of your privacy, with minimal sharing of personal and investment information unless required to do so by law. Your silver is a highly private investment and one you don’t want to share with more than you need to.
- Good communication – Responsive out of hours email response or an extended hours telephone service – the global silver markets run 24-7 and there may be occasions when you or your advisors need to make a move quickly.
- Respectful friendly and knowledgeable customer services – with staff able to handle any request both with private customers or as part of a silver IRA in working with your custodian. After all transfer delays can cost you money in a rapidly moving market.
- Efficient processes – all safeguarded against errors and omissions. When a good vault says they’ll do something they do it, with full traceability from your request to the completed task.
A straightforward and transparent service is helped by:
Responsiveness and efficiency indicators include:
When you’re vaulting your bullion investments it’s essential that you only deal with the best vaults in the marketplace – this is no time to cut costs or reduce service expectations at the expense of increasing risk.
We recommend Delaware Depository Services Company, Brinks and International Depository Services Group
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What are Silver Storage Fees?
Storage fees for bullion vaulting varies considerably from bank to bank and bullion vault to bullion vault, although in general there are two ways fees and costs are calculated.
Some vaults charge as a percentage of holding value and others charge a fixed monthly or annual fee. Percentage fees run from 0.5% to 2.5% usually on a reducing scale with a lower fee charged for larger holdings and a minimum holding amount.
Other vaults offer fixed fees running from $300 – $500 per year although there are a number of special offers especially when vaulted as part of a retirement plan or other savings plan.
Example: Goldco Fees and Vaulting Charges Inside and Out Of an IRA
Goldco sell precious metals both as IRA and non-IRA transactions.
Minimum investment levels:
Consisting of $50 set up fee, $80 annual maintenance fee, $100* storage fee, $30 wire fee
Consisting of $80 annual maintenance fee, $100* storage fee
Goldco currently charge zero vaulting fees for any non-IRA investment over $3,500
Click here to learn more about Goldco’s services
How to Vault Silver in an IRA?
All silver held in an IRA must be vaulted – by law – in an approved bullion vault or storage depository.
Despite the claims of home storage IRA companies, the IRS is clear that in order to take advantage of the tax-advantaged benefits a silver IRA brings, you are obliged to hold the metals in an approved facility, risking fines or worse by taking any other, non-explicitly stated storage route.
Thankfully, the silver storage facilities and storage depositories used by most Silver IRA providers and all professional precious metals investment companies are top-level secure vaults more than meeting government requirements and utilizing the best insurance policies in the market.
The actual process of vaulting silver in an IRA is as simple as filling a few forms and if required opening a new self-directed IRA account – should your existing retirement account not be able to hold physical silver.
When you fund your IRA, having worked with your investment advisor to select the choice of precious metals best suited to your circumstances – the vaulting part of the process is automatic.
As soon as your silver is paid for it is delivered direct to the approved facility and held in a segregated or allocated account depending on your choice.
Sometimes you’ll have a choice of vaulting location where a dealer works with several depositories and custodians – and in many cases you won’t even need to pay vaulting fees as many bullion companies waive first-year fees for new customers or for investments over a certain dollar amount.
This is why gold IRA accounts are so popular: If you’re planning on vaulting your silver investments anyway, why wouldn’t you wish to get some financial help in the way of tax breaks at the same time?
We cover the full benefits of a silver IRA here, but even looking at the most obvious benefits; the tax breaks, the free vaulting and enjoying a fully hands-off done-for-you service – it’s plain to see why millions of Americans are taking advantage of these accounts.
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