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Buying Gold From Banks: What You Must Know 

A bank.
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If you want to diversify your investment portfolio, precious metals are an excellent choice. Solid gold and silver are safe and reliable assets, they offer a private and confidential store of value with complete wealth protection. There are lots of different ways to buy gold coins and bars, and one option is from central and government banks. Some of the largest hoards of precious metals are owned by the national government, such as the United States Treasury’s billions in Fort Knox

Out of the many different ways to buy precious metals, purchasing gold from banks might seem like a good idea. However, before you decide where to spend your hard-earned cash, there are a few things you need to know. Buying gold coins from banks can be different than going to a pawn shop or coin dealer, so it’s a good idea to do some research before you commit. 

In this article, we’ll help you decide if buying gold coins from the bank is really the best idea. We’re also going to share a few of the very best alternatives, places where you can buy gold which may be much better suited to your personal investment strategy. From finding a reputable dealer to achieving a fair price, buying gold isn’t an easy task. Read on to find out exactly what your options are, and the most important things to know when buying gold from banks. 

Is Buying Gold From Banks A Good Idea? 

There are plenty of reasons why a new investor might think banks are a reliable place to purchase gold. After all, as a regulated establishment, a bank should offer quality products at a fair price. It’s true of course that your local bank is probably more respectable than your local pawn shop, so why not buy gold bars from banks? 

Banks are useful to investors in many ways. They can offer loans and mortgages, provide online banking, and even offer a secure safety deposit box for you to store your precious metals investments. Working within the traditional banking system is a vital part of investing in the modern-day, but you don’t need to turn to them for everything. 

When it comes to selling gold, your bank is no expert. Even if a central bank holds its own supply of gold, it’s unlikely that this is available for purchase. Any gold for sale in a bank is there to offer convenience to customers rather than a true investment opportunity. That means you could find a better deal at a reputable dealer or official bullion retailer. Banks cannot offer the same range of choices and quality of services as an official bullion dealer, as their priorities are not in gold and silver. 

A bank.

There are much better ways to buy gold than from banks.


5 Reasons Not To Buy Gold From Banks 

While it’s understandable to think buying gold coins from banks is a good idea, we’re going to share a few reasons to the contrary. You need to know all the facts before deciding to buy gold from a bank so that you can make the best possible decision for your investment. 

1. Higher Premiums

Banks will sell at much higher premiums than other precious metals retailers, and you’ll often pay up to 10% above the current price. Investing in precious metals is all about making smart financial decisions and saving money, so don’t destroy your efforts by giving away that money to a bank. Finding a fair price when you want to buy gold from a bank is very difficult, and opportunities are available much closer to the spot price of gold. 

2. Harder Sell-Off 

Depending on the coin and bank, gold may be more difficult to sell to jewelers and dealers if you bought it from a bank. If you do manage to sell off your investment, the payoff could be lower than you expected. 

3. No Returns

Because banks are not equipped with specialists trained to assess precious metals, they don't buy gold coins and bars. Unfortunately, this included the very same gold coins they sold to you. Coin dealers and precious metal merchants will almost always happily buy back any gold coin or bar. Regulations prevent banks from allowing this, so you might want to reconsider any decisions to buy gold there. 

4. Fewer Choices 

If you do manage to locate a bank willing to sell you solid gold, chances are you can only find coins. Buying gold bars from banks is much more difficult as few will stock this form of precious metals. Even the coins may need to be ordered in from another site, meaning you as the customer will have to wait. Many investors prefer to buy gold bars instead of coins, but banks are unable to provide this. 

5. Not Secure

Unlike independent precious metals dealers and online retailers, banks cannot offer a safe way to transport your investment home. If you buy gold from banks, you won’t benefit from a secure delivery and will have to take the risk of transporting your valuable item yourself. Not only is this a security issue, but it’s also inconvenient. Instead of traveling to a far-away location, why not try buying precious metals online instead. 

Now that you know these important facts about buying gold from banks, you can make a more informed decision. We’re going to share a few alternative places where you could buy gold that might be more reliable than a bank. Read on to find out exactly how you can safely and successfully buy gold coins and bars. 

Different Ways to Buy Gold 

When you decide to invest in gold or silver, there’s no single route to go about it. There are actually several options open to investors offering different ways to buy gold. Each different approach has advantages and disadvantages, so you need to make a choice depending on your own investment goals. Every buyer of gold and silver is different, so make sure you make the right purchase for you. 

Bullion is a term we use to refer to solid gold and other precious metals. Gold bullion can come in the form of coins or bars, but it’s generally purer than 99%. Buying gold bullion is usually intended as a form of wealth protection and storage because this asset cannot depreciate in value. You can purchase gold bullion from banks and local markets, but the most popular way to purchase is through online dealers. 

Gold bullion coins and bars make up a huge proportion of the precious metals market and are easily the most popular investment today. The American Gold Eagle is a great example, it’s one of the most popular gold coins on the market which makes it very easy to buy and sell. A reputable coin dealer can easily recognize such a coin, whereas a bank would not buy it from you. You can make buying and selling gold coins much easier by doing it in the right place. 

Rare coins can also represent investment opportunities, but they can be more unstable than bullion. The gold content of an ancient coin is questionable, and its value is based around more than just the current price of gold. For this reason, numismatic coins are a better purchase for collectors, who will appreciate their historical value. 

Gold jewelry is another form of investment that could be seen as more traditional. Most people wouldn’t buy a gold necklace to leave it sitting in a vault, but this technique would offer investment potential. Unfortunately, jewelry is not the most economical way to buy gold and is more suited as a gift than an addition to your portfolio. While a piece of gold jewelry could turn out to be a smart long term investment, it will likely hold more value as a family heirloom. 

When you buy gold from a bank, all of these options are whittled down to a few limited choices. Often, banks will offer a select few gold coins, and this is the furthest reaches of their investment potential. To be a successful investor into precious metals, you need to afford yourself wider opportunities. Open up a whole world of solid gold potential, from bullion bars to delicate jewelry, simply by moving past the idea of buying gold from banks. 

Where To Invest In Gold 

We’ve covered the options available to you when making a gold investment. We’ve also established why banks might not be the best choice for a lot of investors, as there are many reasons your money could be better spent somewhere else. Higher prices, lower security, and a lack of convenience are all convincing reasons to avoid buying gold from banks, so we’ll share a few alternatives now.

Luckily, banks aren’t the only places that sell gold, in fact, there is a whole range of options open to investors. From gold dealers to pawn shops, physical gold is everywhere if you know the right places to look. Depending on your personal investment strategy, one way to purchase gold might be much more effective than the other.

Local coin shops could be a great place for new investors to start out, you can find these dealers all over the US. These small retailers are usually authorized by the government to buy and sell gold coins. This option is perfect if you want to start small, but coin shops rarely carry pure gold bars. It’s a good idea to check if any retailer is approved by the Better Business Bureau before you take any valuable coins there. 

One thing the U.S. Mint and your local coin dealer have in common is that they both offer a tangible asset. You’ll purchase and benefit from owning physical gold, but not every investor takes this strategy. There are certain ways to own gold that don’t involve taking the physical asset and instead rely on the stock market to protect their wealth. One such option is ETFs.

Exchange-traded funds are special assets that allow you to buy and sell gold and silver on the stock market. By trading ETFs, you always pay the exact market price of precious metals. Similar options include buying mining stocks or mutual funds in gold companies. While all of these investment opportunities allow you to profit from gold, you don’t benefit from owning it. In addition, none of these investment options equal a tangible asset and are in essence just papers and numbers. 

Online precious metals dealers are by far the most popular way to invest in gold and silver. By using a reputable online business, buying gold is quick and convenient. You can easily compare prices and check the current spot price of gold, and your investment will be safely delivered directly to your home or chosen storage facility. Buying online has its dangers as well, so we aren’t recommending you input your credit card details into any old website. 

Only work with trusted bullion dealers who are established in the precious metals business. That way, you can buy gold and silver coins and bars with complete peace of mind. Online dealers can offer a much wider range of products and choices than any bank or local shop, all from the comfort of within your own home. Just make sure you do thorough research beforehand, and watch out for those additional shipping charges! 

A gold bar.

Buying gold from a bank requires you to physically visit a location and then transport your gold and precious metals to a storage facility.


How To Buy Gold From Banks

Now that you’ve reviewed all the options, you know if buying gold from the bank is a good idea for you. Should you decide to follow through with this option, we’ve written a brief guide on buying gold coins and bars from the bank. Firstly, it’s a good idea to call up your local bank and ask if they have any gold available for purchase. Even if your bank does hold a store of gold, it isn’t necessarily available to the public. 

Your bank should be able to provide plenty of information over the phone about buying gold from its establishment. As well as finding out what they have for sale, your bank should let you know anything you might need for the transaction, such as bringing along a form of ID. There may be certain additional steps to make your investment possible. After locating a suitable bank, you need to do some research on the current gold price. The cost of gold fluctuates all the time so you need to be informed on your day of purchase. This way, when you arrive at the bank, you’ll know straight away if they can offer you a good deal. 

If all the conditions are favorable, you can make a purchase from the bank. You should be able to pay using a credit card or checks, depending on their policies regarding the sale of gold coins. Make sure you also obtain the certificate stating the value of your gold, along with the amount of gold coins you purchased. You’ll then need to transport these valuable items to a secure location or private storage facility. 

What’s the Best Way to Buy Gold? 

Precious metals investors are faced with a lot of choices, so it can get confusing when every source is telling you a different way to spend your money. If you’ve landed on this page, chances are you’ve made the fantastic decision to invest in solid gold. Gold as a tangible asset has many benefits, above all else, it offers a completely confidential and secure store of wealth. You can buy mining stocks or ETFs to make money from the gold industry, but these options don’t come close to owning physical gold. 

Most buyers purchase their gold and silver from online retailers now, but local options are still available. Banks and coin dealers can offer a limited selection of gold to investors, but modern investors prefer the convenience of online bullion. You can find a huge range of gold and silver coins from all over the world on trusted bullion sites. Numerous precious metals products from many different countries can be bought from GSI Exchange. 

We recommend checking out our definitive guide to precious metals investing; it’s full of fantastic trade knowledge telling you how to make money from gold and silver. We’ll share advice on difficult subjects and shed light on the most confusing areas of this industry. The world of bullion might seem complicated, but it’s far more straightforward than any other form of investment. There’s no way to warp or corrupt the value of gold; this safe haven investment is considered the forever asset. That’s why it’s vital to take action now and get involved with gold and silver. 


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All articles are provided as a third party analysis and do not necessarily reflect the explicit views of GSI Exchange and should not be construed as financial advice.

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