Some people remember the interest rates on savings books in the mid-1980s: 4-5% p.a. were quite realistic. Today, savers are struggling with zero interest rates and inflation of 7% and more. On top of that, there are the account fees. So you pay for your savings and the bank earns its money.
So a gold savings plan is definitely an alternative to that. However, there are a few things you should know...
Interest vs. value preservation
Even if interest rates on savings deposits only rise again: Because of high inflation, the real interest rate will remain negative in the long term.
Money in a savings account or a call money account is therefore a minus deal for every saver - investing money safely in the bank today is no comparison to the 80s.
Gold does not pay interest at all. But the good news is: gold has steadily increased in value and has been the guarantee and protection against the loss of purchasing power of currencies for thousands of years.
The price of gold is currently quoted at around 1,740 euros, which is more than 5 times higher than 20 years ago. The average gold price in 2002, the year the euro was introduced, was around 310 euros per troy ounce.
With the decision to hedge assets with gold, one is in prominent company: Despite all prophecies of doom, the central banks have also been hedging heavily with gold and silver since 2008. They bought precious metals on a grand scale. And if the bank and the state are hedging with it, citizens should also consider it.
What is a gold savings plan?
As a rule, a gold or precious metal savings plan works as follows: You invest a certain amount of money each month with a provider in gold (or another precious metal). Depending on the current gold price, you then receive ownership of gold in the form of gold bars or coins. Over a longer period of time, you can accumulate a small gold treasure even with small savings amounts.
One advantage of a gold savings plan: If you buy gold again and again at regular intervals, you can also compensate for price fluctuations in the gold price in the long term.
But be careful! In addition to reputable providers such as banks, refineries and precious metal dealers, there are also some black sheep on the market for gold savings plans!
Caution Gold Savings Plan - You should pay attention to this, otherwise it will be dangerous!
1) In general, gold is a long-term investment and should only concern capital that is easy to spare. When buying gold, one should not count on short-term profits, but see it as a long-term security. Crisis times should be able to sit out with calm nerves and always have an appropriate capital cover.
2) Beware of high fees! If you are unlucky, you will pay high "setup fees" at the beginning and also pay a hefty premium when buying gold regularly. You may also only be able to sell your gold to your provider later. And at a poor rate. Also beware of long gag contracts that tie you disproportionately to the provider.
3) Gold savings plans are only worthwhile if you also physically own the gold! With many providers you only buy the "co-ownership" of physical gold. However, this remains in the vaults of the providers. The delivery of your gold pieces is often not provided at all, or costs extra fees!
If it goes badly, you get your gold bars / coins but only from a certain amount, eg 500 grams (equivalent to about 28,000 euros!) Handed. And sometimes you don't see your money at all. Unfortunately, all this has already happened.
Gold savings plans without physical gold in their hands and other forms of "paper gold" are - just like the currency - only colorful printed paper in the event of a crisis.
4) When buying gold, in addition to common bullion coins, it is important to buy only branded bars from Good Delivery manufacturers. These manufacturers are authorized to produce those 400 ounce bars which are then also traded worldwide by central banks and states. Smaller bar products from these manufacturers are bought back from banks worldwide due to this Good Delivery status (LBMA license). Only with these you get good conditions in case of sale (lowest loss on sale). Other gold bars are often not bought back at all or only with high discounts.
Buy gold monthly with plan instead of gold savings plan
A gold savings plan with a reputable provider can be a good way to secure your assets and protect them against loss of value. However, instead of contractually binding yourself to a provider and possibly only acquiring gold on paper or at poor conditions, we recommend always buying gold directly as physical gold coins and bars. Do this at regular intervals and you will have all the advantages of a gold savings plan:
- If you buy gold coins or bars directly, you really hold the pieces physically in your hands. There are also no extra costs for the delivery of your property.
- You have full control over denomination and products. For the optimal denomination applies, depending on the investment amount, to seek advice from an expert.
Smallest units are very expensive due to the share of production costs in small bars and therefore only conditionally recommendable. A reasonable price-performance ratio is obtained from about 50 grams of gold bars. For smaller units, bullion coins e.g. 1-fold ducats are the better choice in terms of price.
- No vendor lock-in: you have price comparison and complete transparency when you buy. Bankable pieces (LBMA bars + common bullion coins) you can then resell at any time, worldwide and without large discounts at any bank and any precious metal dealer.
- You do not pay any ongoing fees for the storage of your vault gold. The disadvantage: You have to worry about the safekeeping of your gold yourself.
All it takes for such a personal gold savings plan is some discipline and a dealer you can trust.
Exchange gold instead of buying
An additional tip that no one else will tell you: you don't always have to pay for gold. At Gold & Co you can exchange your old jewelry directly for investment gold. This means that you don't even have to worry about a high gold price: Because the higher investment gold price is compensated by the higher value of the old jewelry.
Because even real gold jewelry is not a good investment. When you sell gold jewelry, you usually only get paid the material value. When you buy it, however, this only makes up part of the price. The jeweler's margin and the goldsmith's production costs, which are also included in the price, are lost when the jewelry is resold.
Advice on the right investment in precious metals for any investment amount is also available from us free of charge. Simply contact us at 01/23 50 222 or come directly to one of our branches at Währinger Straße 48, Landstraßer Hauptstraße 8 and Kagraner Platz 1 (in the K1 shopping center).