Features of opening an impersonal metal account
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Gold prices have returned to multi-month highs. Traditionally, investing in precious metals is viewed as portfolio diversification. And the easiest way to do this is to open an impersonal metal account in a bank. However, such investments are designed for long periods due to the recent increased volatility in gold prices. In addition, it is necessary to take into account the spread of quotes for buying and selling in banks and the specifics of paying taxes when exiting such investments.
Golden roller coaster
On the world market, gold quotes in recent days have been near the level of $2,000 per troy ounce, whereas at the beginning of the month they were close to $1,800 per ounce. It is worth considering that the historical maximum in the gold market was recorded in May of this year, when quotes on the spot market exceeded $2,080 per ounce. In addition, short periods of exceeding the level of $2,000 per ounce were recorded only in August 2020, March 2022 and April-May of this year.
The Russian precious metal market largely follows the movements of the world market, but the dynamics of the dollar exchange rate also plays an important role here.
In particular, at the Moscow Exchange trading the price of gold reached a historical maximum of 8 thousand rubles/year in March 2022 (after the rapid growth of the American currency). However, by the middle of last year it dropped back to 3 thousand rubles/year. However, since the fall of 2022, one can note an almost continuous rise in the price of gold (including against the backdrop of another rise in the dollar exchange rate). And by mid-August 2023, the exchange price of gold reached 6 thousand rubles/year. The price of the precious metal remained near this level for the next two months.
Significant share
In such conditions, banks are registering a steady interest in investing in gold, and primarily through the most accessible financial product – impersonal metal accounts (UMA). In fact, it is the cash equivalent of a certain amount of precious metal purchased by the account holder from the bank. The financial institution sets prices for precious metals independently, based on quotes from the Bank of Russia.
The number of clients with compulsory medical insurance at MTS Bank increased by 60% over the year, while the volume of their portfolio doubled. Since the beginning of the year, the volume of funds placed on metal accounts in PSB has grown by more than 40%.
“By the end of September 2023, VTB clients opened more than 49 thousand impersonal metal accounts, which is 15% higher than the result of September last year,” notes Natalya Tuchkova, head of the VTB Savings department.
Currently, the main metal of compulsory medical insurance is gold. However, banks also offer accounts in other precious metals – silver, platinum, palladium. “The main customer demand is gold, which accounts for more than 50% of the total number of contracts. In second place in popularity is silver (29%). In ruble equivalent, the first place is also occupied by gold (83% of investments in compulsory medical insurance), and the second place by silver (8%),” notes Ms. Tuchkova. “Accounts in gold and silver are in greatest demand,” points out Evgeniy Safonov, director of the private capital department of PSB. “The obvious favorite is gold—the absolute majority of accounts are in this currency, but demand for other metals—palladium and platinum—is also growing,” emphasizes MTS Bank. In addition, at Alfa Bank you can create a basket of several precious metals in a certain proportion.
How much to weigh in grams
When opening an impersonal account, it is necessary to monitor the dynamics of the value of the metal and take into account that the bank sells precious metals at a higher price and buys them back at a lower price than the current exchange price or Central Bank quotes. In particular, for gold, the difference compared to the exchange price can be 2–4% for both sale and purchase.
As a result, the difference between the sale price and the purchase price of the precious metal in banks is about 5%. In some cases, it can drop to 2% or rise to 8–9% or even higher. This depends partly on price movements in the market. The higher the fluctuations in quotes on exchange trading, the higher the spread will be. This is one of the most important indicators, since, having opened a compulsory medical insurance in one bank, even at a lower price, it will not be possible to “sell” it in another bank at a favorable price.
Compulsory medical insurance transactions, including purchases and sales, can be carried out online. At the same time, prices for precious metals online and in a bank office may differ slightly. Note that in the terminology of deposit accounts, compulsory medical insurance means both replenished and with early withdrawal of funds.
That is, the client can at any time buy additional precious metal into the account or sell part of it from his account. The volumes of such transactions are established by banks.
In most cases, the minimum purchase volume to open an OMC is 0.1 g for gold and 1 g for other metals. Alfa Bank has the lowest starting weight – 0.01 g of gold. In Sberbank – 0.1 g for gold, platinum and palladium and 1 g for silver. At the Russian Agricultural Bank it is possible to carry out transactions in precious metals only in whole grams. And at RRDB, the minimum purchase weight for gold, platinum and palladium is 10 g, silver – 100 g. At Lanta Bank, opening an account in gold – from 1 g, in silver, platinum and palladium – from 300 g.
Playing for the future
Investments in “paper gold” are an addition to the financial assets of private investors. Evgeny Safonov believes that metal accounts will remain one of the popular tools for asset diversification. Moreover, bankers view them as long-term investments. For example, Sberbank recommends “buying precious metal for at least three to five years.” This is due, among other things, to the high volatility of market rates of precious metals. For example, the price of gold on the Moscow Exchange over the past three months has fluctuated in the range of 5.6–6.1 thousand rubles/year. Even with a generally monotonous rise in quotes over the past year, there have been long (up to two months) periods of pullback in quotes.
Sberbank recommends taking into account the specifics of taxation of income from transactions with precious metals. When receiving income from the sale of metal purchased less than three years ago, the client must pay personal income tax. Profit from compulsory medical insurance, if the account has been active for less than three years, is subject to personal income tax equal to 13%. If the account owner’s income exceeds 5 million rubles, personal income tax is 15%. It is not the bank that pays the tax, but the account owner himself.
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