Buying gold can be hard, especially if you don’t know where to start. You might not be aware of gold prices, or you may not even know where to start looking for shops that sells gold. In this article, we will guide you on how to purchase gold in Singapore smoothly, regardless of whether you want to buy gold physically or via a gold savings account. Without further ado, let’s start:
Before we go and discuss how to purchase gold, let’s discuss first the reasons why gold is a hot subject for investments or as a collection.
1. Gold is a countermeasure to inflation
Money loses value as time passes as a result of inflation. On the other hand, gold does not suffer from inflation. On the contrary, it even increases in value in economies with rapid inflation, which makes gold a really wise investment choice. This leads us to the second reason…
2. Gold is a foolproof investment
Gold is much safer than currency in terms of holding their values. They are even more better when you diversify your portfolio using gold since it is not directly related to other assets like properties, stocks, and fiat money. This means that even if those assets perform bad, gold will remain unaffected.
3. Gold is becoming even rarer
There are huge demands for gold in global markets such as India and China, which further drives the price of gold even higher. As such, gold is an ever-attractive candidate for collecting or as an investment asset.
Main ways of purchasing gold
Buy physical gold
Purchasing gold physically is the classic way of purchasing and investing gold. However, there are some factors you need to consider when buying gold in a physical store. First, stores generally sells their gold at a high markup price, which makes it really easy to purchase gold that is way higher than their market value.
Advantages of buying gold physically
1. You get to keep the gold
This advantage is mainly for people who want to look at their gold collection from time to time. When buying gold using a gold savings account, you will usually not even see your investments physically. You will only be able to look at your gold investments in numbers. For a pure investment reason, this may not seem important. However, if you are collecting gold, or if you like to see your investments physically, then buying gold on a physical store is your way to go.
Disadvantages of buying gold physically
1. You need to have a secure place to store your gold
The disadvantage of having the gold with you physically is that you need to have a safe place to store it. Gold is a good target for burglars, especially if you have a large amount of them (which you will do if you are buying gold as a collection or as an investment). If you possess the gold physically, you will have to invest in safes and security features for your home, or hire a vault in a bank or other secure storage facilities. These can quickly add up to your expenses, but they are expenses that you must incur if you want to keep your hard-earned investments safe.
2. Low liquidity
It can be hard to sell actual gold at a high cost. Banks and other institutions that are accepting gold will usually offer to purchase them at a lower price, which is not a good idea if your gold is treated as an investment.
Gold savings account
With a gold savings account, you can purchase gold without having the need to keep it physically. There are banks that allows a very generous minimum amount, allowing people to invest gold weighting at just 1 gram.
Buying gold using this method is easy since you can just pay your bank with cash, checks, or by deducting the due from your existing accounts at the bank. With that said, withdrawing your gold is also easy. You can just arrange for a credit in your bank account, allowing you to transfer your gold investments into cash sent directly in your accounts.
If you are going to purchase gold using this method, we recommend you to use UOB Gold savings account. UOB Gold savings account offers the best gold conversion rates in Singapore and other benefits.
Advantages of a gold savings account
1. Easily invest without dealing with storages
With a gold savings account, you can easily invest money on gold without having to worry about security and storage. You will not have to deal with protecting your assets from thieves since the bank will take care of the gold for you.
2. High liquidity
As mentioned earlier in this article, you can easily convert your gold investments by transferring their value directly to your savings account within the same bank.
Disadvantages of a gold savings account
1. No earned interest
As opposed to a regular bank account that earns interests, there is no such thing with a gold savings account. In addition to your gold savings not having any interest, you will also be imposed with a service fee in case the balance of your gold savings account has fallen below the required minimum amount.
2. Fees for withdrawal
Banks usually charge a conversion fee when converting your gold investments into funds for your savings account. You need to keep this withdrawal fee in mind when computing for your revenue and account for it properly, or else your profit computation might be off.
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