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How did I open a Silver Savings Account with UOB

Commodities, Investments

Written by:

Alvin Chow

Before I share my experience, I would like to explain my objective of buying Silver.

Why did I buy Silver?

I bought Silver for insurance. In the event that inflation or hyper-inflation occur in the future, paper money will devalue and people will exchange money for precious metals like gold and silver which result in higher prices. As the market is getting deregulated, there will be more frequent and major gyrations between booms and busts. I would believe we are going to a volatile future. Hence, I want to emphasize again, I bought Silver for INSURANCE, NOT INVESTMENT. Gold and Silver are negative yielding assets, they incur storage costs and do not pay dividends or interests. Thus, do not treat them as investment as they are not.

But why not Gold?

Most of the reasons are covered in Michael Maloney’s “Investing in Gold and Silver“. Silver is less overpriced as compared to Gold and in addition, there are industrial applications for Silver. There are also less supply for Silver. With more demand and less supply, the potential for Silver to rise in price is higher.

Why Silver Savings Account with UOB?

I was considering both iShares Silver Trust ETF and UOB Silver Savings Account. The former is traded in the NYSE and I actually activated my US stocks account last week. There is ease of buying and selling and the spread would be smaller. The main reason that stopped me from buying the ETF is that it is denominated in USD. With the understanding of the weakening dollar and its grim future (due to its debt), I do not want to take the currency risk. Hence, buying Silver denominated in SGD makes more sense to me. The advantage of the Savings Account is that it is denominated in SGD, there will not be currency conversion loss. Unlike buying physical Silver, there is no GST charges! The only drawback is that UOB may not be buying actual physical Silver to back my accout. But I trust Singapore banks and as long as they pay me when I demand it, who cares if they hedged their position.

Now, my experience… (not in exact words but the sequence of events is more or less there)

I approached the teller.

Me: “Hi, I would like to open a Silver Savings Account.”

Teller: “Do you have a Savings Account?”

Me: “Yes. I have a Savings Account.”

Teller: “Have you brought the passbook?”

Me: “No. Is there anyway that I can do it? Anyway the website did not say I need to bring anything.”

Teller: “You have to bring your passbook along. You can go to Parkway Parade Branch as we will be closing at 1230pm. They open till 4pm. Or you can come during the weekdays.”

Disappointed, I replied, “er.. ok. Thanks.” She was still repeating her suggestion while I turned and walked away.

It was 12pm and I walked back home. Brought along my passbook and drove to the same bank again. I was served by another teller.

Teller2: “How can I help you sir.”

Me: “I want to open a Silver Savings Account.”

Teller2 turned to his colleague and asked if there is such product. The greyed hair colleague acknowledged and pointed the item to him on the screen. Teller2 clicked a while and looked confused. He asked his colleague how to go about it.

Colleague: “Do you want to open a new account? You have to press for a queue number at the security guard counter.” Pointing the direction.

Me: “Ok. Thanks.”

Pressed for the ticket and I was next.

Customer Service Officer: “Hi sir, how can I help you?”

Me: “I want to open a Silver Savings Account?”

He looked at me in disbelief.

CS Officer: “Why would you want to buy Silver? I have a client just now who wanted to buy Gold and after I explained to him, he decided not to.”

Me: “Er… I buy Silver for hedging.”

CS Officer: “Hedging? Not very effective. But it is your choice. I would advise otherwise.”

Me: “I am hedging against a potential inflation in the future. If not, what would you advise?”

CS Officer: “I would believe structured deposit and shares would do better. This is very slow.”

My silence hinted to him that I still want to open the account. He did not try to convince me further and just helped me with the process. I was quoted 28.43 per oz. I got 70 oz at S$1990.10. Got a separate passbook just for Silver. Actually I would not have needed my savings passbook as I could just draw out cash from the ATM and hand it over. I think the teller misunderstood me, she might have thought that I wanted to withdraw money.

I am not trying to complain about the staff. Their attitude were good. Just that the product knowledge is not that good in my opinion. I would think that Silver is rarely bought at UOB and it maybe why the staff are not familiar with the processes. It may be a good thing – precious metals are not hot yet. Actually I hope Gold and Silver not go up in prices so that we do not experience a high inflation period. That being said, this is not an invitation to buy Silver. I just want to share my personal experience.

57 thoughts on “How did I open a Silver Savings Account with UOB”

  1. Alvin, Thanks for that note which affirm my decision to buy metal for hedging and silver over gold plus GSA over physical stock. Now I can act on it.

    Reply

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