Comparison of Gold Savings Account

Updates (as of 6 Nov): New price difference % calculated and updated data in table.

In times of hyper inflation or economic turmoil, people are turning to gold investments as a safe heaven. For the past few years of high commodity prices, gold has been a darling of investing communities. Various vehicles of gold investments, such as gold ETF, gold bullion, gold future and gold savings accounts have been launched to attract new customers who want to ride the rising waves of gold investments.

For small time investors in Malaysia, one practical way to kick start your gold investment is via gold savings account. It is basically a deposit account where the money you deposit is used to purchase units (grams) of physical gold. With gold savings account, you do not earn interest but you might profit from the rising gold prices. Of course, with any other investments, there are terms and conditions; and associated fees attached to this account.

Currently, there are 5 commercial banks in Malaysia that offer gold savings account as below:

1. Maybank Gold Investment Account (MBB GIA)
2. Public Bank Gold Investment Account (PBB GIA)
3. CIMB Gold Deposit Account (CIMB GDA)
4. UOB Gold Savings Account (UOB GSA)
5. KFH Gold Account-i

Below is the comparison of personal gold savings account offered by Malaysia commercial banks:

NOTE: To open Google Spreadsheet in a separate tab, click here.

For first timer, Maybank Gold Investment Account seems like a good start with minimum and additional investment of 1g of gold and easier transactions via Maybank 2U. There's also no service/withdrawal charge levied against this account, apart from the one time stamp duty charge. However, this account comes with a relatively high price difference of 4.18% (as of 6 Nov 2012) between selling and purchase price. This to me is quite a big deterrent.

If you can afford to invest more, then in my opinion UOB Gold Savings Account is a good choice. UOB offered the best price difference percentage of 1.18% (as of 6 Nov 2012). This "service charge" is much lower than most of unit trust funds which typically charge 5 - 6.5% of service charge per investment. However, transaction wise, it will be a bit inconvenient since all transactions have to be done via OTC (over-the-counter).

Physical gold withdrawal is not an important criteria for me since you have to think of where to safely store the physical gold and when you decide to sell it again, you will be the losing end due to lower buying price from the banks. Most commonly, you will have to sell your physical gold at gold jewelry stores (most likely at a huge discount)!

In summary, if you can fork out at least RM 3000 for initial gold investment, your best choice is UOB Gold Savings Account which offer the lowest investment cost and no other service charges (if you maintain your account above the minimum balance).