Are you worried about the value of your savings? Do you feel like your hard-earned income will depreciate as currency inflates? Investing in precious metals is a way to hedge against this. Goldmoney is a UK-based precious metals investment firm that helps people save their money in precious metals without needing to store bars.
Overview of the Company
The socioeconomic landscape has radically changed in the past two decades, leaving many people feeling adrift. With the inflation of currency, people are finding that the money they earned years ago is no longer worth what it used to be. Many people are not in a financial position to grow their wealth over time.
One of the biggest problems is that interest on your savings account doesn't typically keep up with inflation. When inflation was less of a problem, interest could help you grow your savings and maintain their value.
Essentially, you're paying the bank to let your money sit around losing its value.
Precious metals don't have the same problem. They are tangible assets that remain steady in their value. In addition, they perform counter to the stock market, so they help stabilize your investment profile during uncertain times.
Gold is valued as an investment because it isn't subject to the whims of a third party. There's no risk of a financial institution or another person mishandling and losing your money. You don't have to worry that a company's actions will cause your stocks to dry up overnight.
But there is an issue of practicality. Most of the economy today runs digitally. Even if you pay for things in cash, you're able to take that cash out of an ATM. You can't easily liquidate gold unless you're willing to sell it for much less than market price, which means it's difficult to use.
One of the proposed solutions is a gold-backed ETF. When you invest in one of these funds, you're buying a portion of the gold funding it. However, these setups tend to have high transaction fees, and they're also vulnerable to the whims of a third party.
Many people have found that they're paying too much money in commissions for transactions to be worth it. Goldmoney was founded to help address this issue.
How Goldmoney Works
The company allows people to save gold without needing to deal with physical coins and bars. You also don't have the high commissions and liquidation issues that come with ETFs.
There are three Goldmoney accounts to choose from:
Most people will benefit from a personal account. Wealth accounts are for people who have enough savings to buy significant amounts of gold. Business accounts are set up for those who want to pay employees and contractors using gold instead of currency.
Let's take a look at each type of account and what you get out of it. We'll examine the services and products offered by each. Once we've done this, we'll examine some company disadvantages to worry about. In the end, we believe that you can find a more reputable precious metals dealer to do everything Goldmoney claims to do.
Keep in mind that you can have several accounts at a time. Small business owners sometimes use both a business and personal account. The business account lets them use precious metals for financial accounting, while the personal one lets them save their money.
When you open a personal account, you can store 1,000 grams of pure gold without paying any annual or monthly storage fees. Storage fees can quickly add up when it comes to precious metals, so this is a helpful advantage.
Instead of owning precious metals that you can access easily, you'll have a legal entitlement to part of a gold kilo bar. If you own 250 grams of gold, you'll be legally entitled to 1/4th of a kilo bar, and so on. The bars are kept in secure vaults in a variety of different jurisdictions.
Though the company is based in the UK, you can choose vaults in seven different countries. These include vaults in Canada, the US, Singapore, Switzerland, the United Arab Emirates, and Hong Kong. Regardless of location, the storage and insurance comes from Brinks, a top security company.
For the most part, you don't need to pay anything for the service except a commission. When you sell gold or purchase it, the transaction will have a fee of 0.5 percent. You can use a debit or credit card for your purchases, unlike many marketplaces that only allow wire transfers.
If you do want to use a wire transfer, you can. However, you'll need to pay 0.5 grams of gold for the privilege. The cost of that will depend on the market price of gold.
The company's buyback program means that you can liquidate your assets any time you want. The funds will then be transferred to your bank account. If you're in a place where you need your savings, you should be able to liquidate them within a day or two.
Goldmoney also offers prepaid debit cards. By redeeming the sales to the card, you cut your wait time down to a day or less. This option is favored by people who often need to dip into their savings in a pinch.
One of the biggest advantages of the account setup is that you can treat it like an online banking account. It's easy to facilitate transactions. At the same time, you get the protection of precious metals over the instability of currency.
The commission price can add up quickly if you're doing a lot of large transactions. However, it is lower than the rate of many ETFs. In addition, you're saving on storage costs.
Business accounts function very similarly to personal accounts. They have all of the same features and allow you to own shares of gold in the same way. However, you can also use payouts and invoices.
With invoices, you can receive payment from your clients in gold instead of currency. If your client uses currency for payment, it will be automatically converted into gold shares. Each invoice has a transaction fee of 1 percent. By comparison, Paypal charges a commission of 2.9 percent, plus they have a flat sale fee.
Another advantage of this is the ease of working with international currency. Goldmoney will convert any currency into gold. So if you're a US businessman working with someone from the UK, you never need to go through the hassle of converting pounds to dollars and vice versa.
With the payouts feature, you can use gold to pay people including:
The principle works the same way. You pay with the gold saved in your account, and the company automatically converts it into currency. That saves you the headache of figuring out how to liquidate your precious metals so they can be used.
If you're fortunate enough to be able to save more than 1,000 grams of gold, a wealth account might be right for you. Once you own over a kilogram of precious metals, you'll be required to upgrade your account.
Wealth accounts are subject to extra fees. At the same time, though, you have more flexibility with your holdings. Some people might choose to open a wealth account even if they don't own a kilogram of gold, since this broadens your options.
Wealth accounts are able to store more than gold. They can also store palladium, platinum, and silver. In addition, you can store nine common currencies used in different countries, making it ideal for those who partake in international business.
Another compelling aspect of this is how you can trade between the currencies and metals. Exchange rates and precious metals prices change rapidly on a daily basis. By moving your assets around as different investments lose or gain value, you can maximize your potential profit.
The account also comes with a Goldmoney Concierge membership. You can call a number to talk to a lifestyle expert about what gifts, nightlife, travel opportunities, and restaurants you should look into.
You will be paying a 2.9 percent fee for every transaction, which is significantly more than the 0.5 percent fee of a personal account. In addition, you'll need to pay a storage fee of 0.12 percent. However, you don't have to pay any fees when you want to sell your gold, so you can make transfers even more easily.
Considerations Before Investing
Unfortunately, despite the convenience and the helpfulness of the service, Goldmoney has extraordinarily bad customer reviews. Consumers say that the customer service is subpar, the prices are unfair, the information is misleading, and the interface is difficult to use.
Because of this, we'd be wary about investing. There are precious metals dealers who will sell you gold and silver with a buyback guarantee. This makes it easy to liquidate the assets once you want to, and you don't have to deal with a poorly-reviewed company.
Reviews are bad across multiple third party websites like Trustpilot, Trustlink, Site Jabber, and the Better Business Bureau. Some of the complaints are serious, indicating that people lost a significant amount of their money to mismanagement.
If you use gold as a currency, you'll be subject to market volatility. The price of precious metals shifts every day. It's influenced by a variety of factors, including the state of different international markets. Gold is an investment that comes with some risk.
For example, the price of gold might fall in comparison to the US dollar after purchasing. If you then pay for US goods with gold, you'll actually be paying more out of pocket than you would if you'd just used normal currency.
For this reason, gold investment is better for long-term savings and emergencies than for use as a regular currency.
Not all of Goldmoney's features are available everywhere. Depending on where you are, you might not be able to access certain aspects of a typical account.
One example is the prepaid card. People in Georgia in the US can't use this card, because the government hasn't approved it.
Another example is that if you're in the US, you can only send invoices to people who have a verified Goldmoney account. But people outside the US can send invoices to whoever they want.
Goldmoney fills a niche by making it easy to use gold as currency, without the same high commission fees that ETFs charge.
However, they get consistently bad customer feedback that speaks to bad business practices. For this reason, we can't wholeheartedly recommend them.