Today I want to give you a street-smart playbook on how to buy and sell physical silver. This is the real stuff, for those of you who like to sleep at night knowing you’ve got the shiny metal in your possession.
Without further ado, I give you the top 4 ways to hold your physical silver…
#No. 1 Safely Keep Your Silver Under Switzerland’s Largest Airport
Gold Switzerland gives you the ability to buy and hold silver while safely storing your personal bullion under Zurich airport in Switzerland. But don’t let the name fool you, these guys are experts in both gold and silver. In fact, their tagline says it best: “The safest way to buy and own gold and silver.”
With an initial purchase of at least 6,000 ounces, you can buy silver and have Gold Switzerland keep an eye on it. Here’s what their 1-2% management fee covers:
- Vault storage of the silver/gold
- Insurance of the silver/gold
- All administrative matters in connection with the buying and storage of the silver/gold
- Early warning alerts and pre-launch reports on the world economy and precious metals
- Quarterly statement of the investor’s silver/gold holdings
- Private investment advice and consultation relating to your investment
Everything is clear-cut with this dealer. You can purchase silver at competitive rates and store it in possibly the safest geographic and political region in the world. Plus, if you’d like to have your personal silver transferred closer to home, Gold Switzerland can organize a secure transport of your bullion.
It’s a one-stop shop for holding silver.
#No. 2 Buy and Sell Coins and Bars with EverBank
EverBank has some of the most innovative accounts the banking world has to offer, and their physical silver options maintain the same high standard.
In an EverBank Metals Select Allocated Account you can buy and sell silver bars and coins. So you can even hold market-friendly, and potentially valuable, coins like American Silver Eagles.
In an allocated account you’ll receive monthly statements describing your personal holdings. Plus, if you’d ever want to take physical delivery of your bars or coins, EverBank offers delivery services.
A key factor to this allocated account is the low opening balance, a mere $7,500. Compared to Gold Switzerland’s 6,000-ounce buy, you’re looking at quite a difference. So this may be the poor man’s way to hold the poor man’s gold.
The last factor that makes EverBank’s offering even more special is that you can hold your silver in an IRA. This is one simple way to help protect and save your retirement nest egg.
Add it all up and EverBank has a very strong offering. You have the option of holding coins instead of plain bullion, you can have your silver delivered AND they offer the IRA option – all for a low initial outlay!
#No. 3 Local Storage in Your Bank’s Safety Deposit Box
The third option I’m sure you’ve heard: simply storing your bullion in a safety deposit box at a bank.
This option has some distinct pros and cons, so let’s take a look….
First, unlike the other two options I’ve mentioned, a local safety deposit box is, well, local. If proximity is a main factor for you in storing your silver then a safety deposit box may be the key.
Heck, I know that I’d like to look at my silver from time to time – maybe even bite a coin or two.
With a safety deposit box you can do that. You can check on your silver with a short trip to your bank – so instead of a monthly statement, you can simply stop in and take a gander. Plus, if you ever have an emergency where you’d need to get a hold of your bullion, it’s as simple as a trip to the grocery store.
Clearly, safety deposit boxes have a few distinct advantages over other remote storage options, but there are also some drawbacks – the main one being that the bank will not insure your physical bullion. You’ll need to have separate insurance on it, which could be pricey.
#No. 4 Making the Markets Work (And Hold Silver) for You
The final option that I’ll share with you comes directly from the commodities market.
You’ve probably heard people say “take delivery” of your silver. This expression comes straight from the commodities markets, which are now run by the Chicago Mercantile Exchange (CME) Group.
The same commodities markets that offer gold and crude oil also offer silver – but this doesn’t have to all be “paper trading.” Instead, you could take delivery of the silver you purchase.
As I mentioned above, one silver bar is 1,000 troy ounces, and the standard CME silver futures contract controls five bars. (If you’d like to see the specs for yourself click here.)
Buying and taking delivery of CME futures contract has several advantages.
First, the contracts are extremely liquid, so you can rest assured that you’re getting a fair price on the silver you’re buying. And second they have storage options if you want to take physical delivery.
For example: you can go directly to the commodities market and buy a silver futures contract for, say, December 2011 (currently trading around $37.70 – a small premium to the current silver price). After purchasing the contract, which by the way would run you $188,500, you can take delivery in December 2011 and have a depository from the CME hold the bullion for you. This option comes with a small storage fee, ranging from $35-$42.50 a month, per contract.
Your personal silver can be held at a few different locations, two of which are HBSC Bank in New York and Delaware Depository Service Company in Delaware. Your bars have serial numbers and can easily be resold – incase you want to hold for a limited period of time.
Another benefit, depending on how you look at it, is that you can initially purchase your silver on margin. So instead of putting up the $200k to purchase your December silver you can put up closer to $10k now, and pay the rest come delivery. Think of it as “lay away” for metals!
Truly, the CME contract and storage may be the lowest percentage cost option for you. But, remember, it requires you to buy 5,000 ounces at a time – a $188,000 investment. I guess it all depends how much of the shiny stuff you want to buy.
So there you have it, four of the best ways to purchase physical silver without the risk of holding it at your house.
For Daily Reckoning Australia