Some clients are not comfortable with the idea of having their precious metals in their home. For these clients, a bank safety deposit box or bank depository may be an ideal solution. Banks offer multiple layers of internal and external security so you can rest assured that your gold is very safe from theft. However, this method may cost you several hundred dollars in fees every year.
When storing your gold with a bank, you may lose some of gold’s advantage of acting as diversification away from the banking system. If your gold is stored in a bank safety deposit box, your access to that gold is limited to the bank’s hours of operation.
Again, with your gold at the bank, your safety deposit box contents may take on risk related to the stability of that bank. In 2008, the US taxpayers bailed out many of the country’s banks and financial systems. A number of financial experts agree that during the next crash, the US cannot initiate another bailout. Rather, this time the banking system may require a bail-in, meaning that deposit holders will be on the hook for the bank’s credit obligations and will give up at least portions of their deposits. We saw this bail-in in action during the European debt crisis when large account holders with Cypress Banks were on put on the hook for their bank’s obligations when they failed. Forbes magazine called this bail-in a “test run” for the world banking system. If you read your safety deposit box agreement, you may find that the contents of your safety deposit box may hold the same status as deposits in your account with that bank, except that the contents of your safety deposit box are not covered by FDIC insurance.