Recently, I was interviewed by a journalist from The Business Times on gold investing.Investing in gold via UOB Gold Savings Account
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Dear readers,
The UOB Gold Savings Account is probably the simplest, if not easiest way to invest in gold. According to the UOB website, you can buy and sell international gold - through a passbook - at prevailing market prices and transact any time during banking hours in units of one gm of gold, subject to a minimum of five gm per transaction.
To simply put, you are depositing cash into your UOB Gold Savings Account and the bank teller will convert your cash amount into grams of gold and record it in your passbook. This method of investment is considered as investing in paper gold.
To sign up, all you have to do is to approach any UOB branch and ask to open an UOB Gold Savings Account. You will be required to produce your identification card to open the account. The process is similar to opening a UOB cash savings account.
Depositing and withdrawing from your UOB Gold Savings Account is just as easy. Simply approach the bank teller at any UOB branch to make your deposit. You must bring your passbook along for each deposit or withdrawal transaction.
As the transaction is considered a deposit and does not involve any purchasing, there is no Goods and Services Tax (GST) levied. Naturally, no premium for production of gold is charged because there is no physical gold involved. The bid spread of S$0.10 between the buying and selling price for each gram of gold is considered very thin as well.
Sounds good so far? Like every investment vehicle, the UOB Gold Savings Account is without its own set of disadvantages.
Firstly, you cannot withdraw physical gold from your UOB Gold Savings Account. Only cash withdrawals are allowed.
Secondly, you will be charged an administrative fee (in grams of gold) of 0.12 gram per month or 0.25% p.a. on the highest balance per month, whichever is higher. This makes keeping low balances in your UOB Gold Savings Account not worth your while.
In my opinion, I find that the UOB Gold Savings Account is a good investment vehicle for investors who simply want their cash to be valued in terms of gold. I use my UOB Gold Savings Account for short term deposits because if the liquidity. The account also allows me to lock in on the price of gold at that period of time. Eventually, I will withdraw the amount to buy physical gold.
So if you are looking for high liquidity, ease of transactions, and do not mind the fact that you are buying paper gold, the UOB Gold Savings Account is the investment vehicle for you.
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7 Responses to “Investing in gold via UOB Gold Savings Account”
hi Christopher,
how does UOB charge the administrative fee ?
mail the charge to you on each month end ?
There is no deposit insurance on gold deposit! Does UOB buy physical Gold to support the deposit?
Hi expsalmody,
I would think that they don’t buy physical gold to support the deposit. If they did, you would have been charged storage fees.
how does the uob bank charge admin fee?
From the UOB website, it states that an administrative fee (in grams of gold) as low as 0.12 gm per month or 0.25% p.a. on the highest balance per month, whichever is higher. The fee is subjected to GST, which will be deducted from your account in grams of gold also.
As for the Silver Savings account, an annual administrative fee (in ounces of silver) as low as 0.2 ounce per month or 0.375% p.a. on the highest balance per month, whichever is higher. The fee is subjected to GST, which will be deducted from your account in ounces of silver also.
For more information, please refer to:
http://www.uob.com.sg/personal/investments/treasury/precious_metals.html
Like you said that you have been using the UOB Gold sav’ account to lock your amount as gold for period of time, after that you withdraw and buy pysical gold.
Could please explain why do you buy physical god instead of keeping the amount in that account. Where do you buy/sell the physical gold. Please give us brief explanation on buying and selling physical gold. Thanks you in advace
Hi Saha,
Firstly, you need to understand that having a UOB gold savings account is very similar to simply having paper gold. UOB charges a fee for maintaining this account and this fee is deducted from your account annually.
If you are looking at keeping gold on a very long term basis, e.g. 5 years and longer, keeping physical gold saves you from paying these fees.
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