Disadvantages of Storing Silver in a Safe Deposit Box (Safety Deposit Box)
Storing your silver in a safe deposit box (safety deposit box) at a bank or depository might have the following disadvantages:
- Disasters – The items stored in a safe deposit box (safety deposit box), silver included, are normally not insured against floods, fires, robberies or similar disasters.
- Accessibility – If you store your silver in a safe deposit box (safety deposit box) at a bank or depository it might not always be accessible, especially during holidays or after office hours. In fact, even in instances where your silver is accessible 24/7 when stored in a safe deposit box (safety deposit box), it’s normally only accessible after successfully passing various security tests (correct signature, correct key, correct code, etc.). Now more than one silver investor or holder of silver might not have a problem going through the security tests each time they want to access their silver, but for some it might be downright annoying.
- Silver confiscation – By storing your silver in a safe deposit box(safety deposit box) at a bank or depository you increase the risk of government confiscation of your silver at least tenfold. The reason being is because it will be much easier for a hostile government to confiscate the silver of 5000 or more people pooled together at a bank or depository than the silver of 5 million people spread out in 5 million or more homes. E.g. no less than 7000 safe deposit boxes were confiscated when over 300 heavily armed police raided the vaults owned by Safe Deposit Centres Ltd in the UK in June 2008.
- Insolvency/bankruptcy risk – This risk refers to the risk of losing your silver as a result of insolvency or bankruptcy on part of the bank or financial institution where your silver is held. If you read the fine print, you will see that by signing the application form for a safe deposit box (safety deposit box) at a bank, you in essence give them the right to make a claim over your assets stored on their premises. You are however not exposed to this risk when storing your silver in a safe deposit box (safety deposit box) at a depository. The reason being is because depositories are independently insured and make no claims over the assets stored. In addition to the above, it is risky at best to keep your safe deposit box (safety deposit box) in a country with a high risk of bankruptcy. It certainly increases the risk of silver confiscation for one.