Gold investment is growing in popularity. At the time of writing this (1 June 2012), the gold price is at US$49.93 (or RM159.58) per gram. Only 5 years ago, gold price was around US$20. Had you invested in gold over this entire period, you would’ve made a profit of almost 150%!
Many Malaysians have asked the iMoney team how they can invest in gold without actually buying physical gold bars or gold bullions. After all, the risks of physically holding on to gold bars as an investment can be very, very high!
In Malaysia, some banks offer gold investment accounts, which allow you to buy and sell gold without actually ever owning the physical bars. The iMoney team has identified five Malaysian banks that offer such gold investment accounts:
- UOB Bank Premier Gold Account or Gold Savings Account
- Public Bank Gold Investment Account
- Maybank Gold Investment Account
- Kuwait Finance House Gold Account-i
- CIMB Bank Gold Deposit Account
Choosing the right bank for gold investment in Malaysia
While these products may seem similar to each other on the surface, they can in fact be quite different. Kuwait Finance House, for example, uses a generic gold bullion that has a gold purity level of 99.5%, while banks like UOB Bank, Public Bank and Maybank all claim a gold purity level of 99.99%.
Another important point when choosing between banks is to look at the bank’s “buy-sell spread”, which is the difference between the price you pay when you buy gold, and the price you receive when you sell gold.
For example, if it costs RM160 to buy a gram of gold from Maybank, and at the same time, Maybank would only pay you RM150 when you sell a gram of gold, the “buy-sell spread” would be RM10. Sometimes, this “buy-sell spread” is expressed in a percentage form.
To maximise your profits, choose a bank with the smallest “buy-sell spread”.
Lastly, pay attention to hidden fees and charges. Some banks like UOB Bank and Public Bank will charge you a fee if your gold balance (i.e. the amount of gold investment you have in your gold investment account) falls below a certain level. Others like CIMB Bank may charge an early account closing fee if you choose to close your account within 6 months.
Keen to get started? Want to know which bank offers the best deal for gold investment in Malaysia? Check out iMoney’s Gold Investment Account Comparison Table Now!
