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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. Hi Alvin,

    Let’s say the price of silver goes up to 2 fold and it becomes 2k sgd, and you made 2k in profits. How would that hedge against anything? I’m saying that the absolute value of that amt hedged is not good enough to offset the higher prices of goods that you can buy with your devalued money.

    What do you think?

    Reply
  2. LP, I think the key is balance. Obviously it is not sensible to convert everything to precious metals because hyper-inflation may not happen or not be that bad. At this juncture, it is ok to set aside <10% of the portfolio for gold/silver. It is like buying life insurance, we do not buy all that we can afford, even though we will certainly die in the future. It is to cushion the worst case scenario. Like what you pointed out, the $2k gains may not offset much, but it is better than nothing. If the scenario of high inflation becomes more likely, the amount of protection can be increased. Exposure to other commodities is possible too.

    Reply
  3. Hi Alvin,

    Thks for explaining your point to me, appreciate that. Hmm, my understanding is that if your portfolio consists of mostly cash and cash equivalent (like fixed deposits), then it makes more sense to hedge against the possible hyperinflation scenario because cash is not worth much in that case.

    What about equities? By right, equities should be able to ride off the inflation…inflation means we pay more money to buy goods, then companies that made the goods will earn more, and we buy their shares…of course not all companies will be able to gain in such scenario but doesn’t it make more sense to invest in equities to offset inflation?

    What I don’t understand is that are we hedging because people are doing that, books are saying that? Is there a dollar amt that you are going to hedge against? 10k, 20k, 30k? If we don’t know how much we want to hedge, then how do we know how much of the portfolio to hedge by putting into metals? What are the expected returns of the metal hedging in order to successfully hedge? What is the shortfall if we’re only hedging a part of it?

    I guess I don’t understand the point of hedging just for the sake of hedging. Might be better to do a part time job to do the hedging or take up more tuition etc.

    Reply
  4. You can also think in the way that raw materials will be very expensive and that is why companies have to charge higher prices. Due to the high costs, the profit margin can remain the same despite a rise in the price of goods. And if people cannot afford to buy the products, businesses will go bust. Equities in my opinion, would not do well.

    Inflation is a necessary evil. We need some of it for economic growth. If inflation gets out of hand, your wage does not catch up as fast as the costs of goods, then only commodities will rule.

    I may not be totally correct, but I felt it is necessary to err on the safe side.

    Reply
  5. hahaha, almost like 10 years ago when i open a gold account with the same bank.

    the teller spend 10 minutes to find the passbook, and the officer spend another 10 minutes pursuae me not to open one, cause they can’t find the passbook. haha. at the end i open the account.

    Reply
  6. well i should probably had open a silver account instead. never though of that. but that was the time where you can probably find some gold in rubbish can. gold was trading around USD 300/oz and silver i think was around USD5/oz.

    Reply
  7. stagflation good for stock markets? Anyone familiar with the period 166 to 1982? See that period how did the stock market perform?

    Most people are NOT prepared for stagflation scenario, where economic growth (Sales) is slow and inflation high (Costs), in such a period, what do you think will happen to companies’ profits? Up or down?

    I have about 7% of my wealth in Gold and Silver, average price is US$790 for Gold and US$14 for silver.

    Cheers!

    Dennis Ng

    Reply
  8. “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.”

    Isn’t paying in SGD upfront basically mean they just convert the USD equivalent into SGD for your settlement (earning the exchange rate spread)

    And whether we pay in SGD or USD you still end up holding “Silver saving balance” which is quoted in USD (for that matter all commodities are quotated in USD) hence flucuate with USD.

    Until the day we have decided to cash out & convert back to SGD then we can see if Silver appreciate more than enough to cover the loss from converting those USD back to SGD (another round of exchange rate)

    Confuse???

    Reply
  9. Hi Alvin,

    I started my UOB Silver Savings Account earlier this year at Raffles Place, the main branch. No trouble at all. Very fast. 🙂

    I started buying gold bullion coins early last year. At that time gold was about US$800 an oz. Earlier this year, I did some research which led me to believe that silver would outperform gold and it has. I would like to share my research with you:

    http://singaporeanstocksinvestor.blogspot.com/2010/02/gold-or-silver.html

    Reply
  10. I think we also got to put into perspective on the strength/weakness of SGD vs USD when it comes to investing in gold or silver. Gold and silver prices have hit all time high when dominated in USD, same goes for SGD against USD. How about gold/silver against SGD, have gold/silver appreciated or depreciated when measured in SGD?

    I do agree we will very likely see stagflation in the US, hence diversifying away from USD into precious metal and commodities is a wise choice. I’m not so sure about diversifying away from SGD, as S’pore economy is expected to remain strong and inflation is kept under control by an appreciating SGD so far (under the control of MAS). Will S’pore ever goes into stagflation or hyperinflation, i think it is pretty unlikely. S’pore will have to suffer some drastic economic fallout via some crisis, and for the government to do QE equivalent before we start to see some absurd inflation numbers.

    Jus my 2 cents worth…

    Reply
  11. Thanks all for the comments.

    Coconut – haha, after 10 years, the experience is still the same 😀

    Dennis – got in at great prices!

    Desmond – The silver savings account is denominated in SGD. Buy in SGD and sell in SGD.

    AK71 – Thanks for the insight!

    Chemmie – I agree I did not get in a good price. But I am preparing for the WORSE 😛

    floser – I would prefer to err on the safe side. Like what I say, I do hope we do not get affected by US or China. But as a small and trade dependent country, we will catch a cold when the big guys sneeze. If USD devalues alot, MAS is likely to devalue SGD to a certain extent to balance imports and exports. In such a connected world, we cannot expect to do what we want to do. This is my opinion.

    Reply
  12. hi floser, i like your view, certainly worth more than 2 cents.

    and alvin, thats the way to go, do not worry about timing, back your view by acting is what more important.

    Reply
  13. is it too late to buy Silver?

    Silver’s historical high price was US$50 in 1980. Gold’s historical high price then was US$850. In actual fact, if we factor in inflation, Gold at US$850 back in 1980 is equivalent to US$2,350 today.

    As mentioned, buying some Gold/Silver is “insurance” against economic uncertainties and high inflation….we hope we lose money becos if we make money, this World will NOT be a very nice place with High Inflation.

    I’ve been sharing on Internet Discussion Forum since more than 2 years back about getting some Gold/Silver as insurance, only in recent months do people start to listen.

    Cheers!

    Dennis Ng

    Reply
  14. I want to buy silver for investment too. Unfortunately, UOB Silver Savings Account is not available for UOB Malaysia.

    Robert Kiyosaki is keep mentioning to invest in Silver too after he has made big money from Gold.

    Reply
  15. Hi I had a surprising experience with U.O.B too,!

    They helped my friend who was on a work pass to open a gold savings account and then when they approached them to open a silver savings account they were told they cannot open the samewithout an introducer.And also the introducers worthiness will be jidged and then approved by the bank.! When the couple informed the bank that they already had a gold savings they were informed it is only for PR’s and Singaporeans and were asked to close the gold savings accoutn also,!!!

    Reply
  16. CFTC (Commodities and future trading commission, USA) commissioner Mr. B. Chilton has announced in a public forum about evidence of manipulation of Silver market.

    Silver is now poised to rapidly move up, over next 3 ~ 6 months, with a possible upside of 30 ~ 60%.

    Have fun

    Reply
  17. Hi Alvin,

    you invested into Silver at S$28.43 in Sep 2010, with Silver prices now above S$37, you’re up by over 30% in 2 months!

    Personally, I invested into Silver at US$14, with Silver prices at over US$29, or up over 107%!

    Cheers!

    Dennis Ng

    Reply
  18. Today silver price at UOB savings account is $38.89/ounce, within 2 months you can earn like 25% which is incredible and no stocks can have this bull i guess! Anyway, I bought it when it was $26, at that time it was recorded high and nobody thinks it will go further and that a correction is within days, but surprisingly the bull keeps going on 🙂

    Reply
  19. Alvin bought Silver at S$28.43 in Sep 2010…(today 2 Mar 2011) 6 months later, silver price is S$43.95, or 54% higher.

    is it too late to buy Silver?

    Silver’s historical high price was US$50 in 1980. Gold’s historical high price then was US$850. In actual fact, if we factor in inflation, Gold at US$850 back in 1980 is equivalent to US$2,350 today.

    As mentioned, buying some Gold/Silver is “insurance” against economic uncertainties and high inflation….we hope we lose money becos if we make money, this World will NOT be a very nice place with High Inflation.

    I’ve been sharing on Internet Discussion Forum since more than 2 years back about getting some Gold/Silver as insurance, only in recent months do people start to listen.

    Cheers!

    Dennis Ng

    Reply
  20. I had about the same experience as Alvin, except i placed about 40k SGD into the account, also i didn’t have the passbook account (monthly statement type).

    Teller called their pit-boss (manager) and pit-boss called HQ.
    After ding-donging for 10mins (to my dismay) they started chatting about
    the price of silver in front of me and 30 other customers.
    After their HQ approved they added the numbers into the passbook.

    Worst thing of all… I heard “GOOD LUCK” from the teller when i turned around.
    20ish pple turn to look at me… WTF…

    I felt like telling the tellers off… CAN U GUYS KEEP IT DOWN.

    Totally unprofessional… made me think twice about visiting that branch again.

    PS: Already up 20%+ from Jan… sick profits..

    Reply
  21. last week,i went to uob bank ,i told the counter that i want to buy silver ,the answer was the silver price is too high now,i said i want to buy silver now ,i don’t care the price i want to invest now,that is my decicion,profit or loss is my own risk ,u just follow my order ,don’t try to affect me.fortunately the price of silver is increase now ,and i made right decision.

    Reply
  22. last week,i went to uob bank ,i told the counter that i want to buy silver ,the answer was the silver price is too high now,i said i want to buy silver now ,i don’t care the price i want to invest now,that is my decicion,profit or loss is my own risk ,u just follow my order ,don’t try to affect me.fortunately the price of silver is increase now ,and i made right decision.

    Reply
  23. Hi Alvin,
    Will UOB buy back the Silver you bought from them if you need to sell the silver now? Is there any commission or charges? Btw, many thanks for writing this blog.

    Best Regards,
    Timothy

    Reply
  24. Hello Timothy, UOB has the obligation to buy back since they are the market maker for this product UNLESS the bank becomes insolvent.

    There is no buy and sell commission except the spread (price difference between buy and sell price). There is an admin charge of 0.2 ounce a month or 0.375% p.a. on the highest balance per month, whichever is higher.

    Reply
  25. Hi Alvin. I Want to buy Silver for hedging too. But, is true that UOB Silver saving account is Only for PR and Singaporean? What happened if there’s bankruptcy ? Is there any insurance that guarantee it? Thank you for your blog. Very inspirative.

    Cheers,

    Angelina

    Reply
  26. I am not sure if foreigners can open a silver savings account. You have to check with UOB. There is no guarantee. If the bank collapse, there goes your investment as well.

    Reply
  27. Hi Kenny, the website did not mention anything regarding foreigners opening an account. You may have to call them or make a trip down to the UOB branch

    Reply
  28. A few disadvantage of investing in silver using UOB:

    1. You can only Long silver (betting it to go up), you cannot short sell when silver go down.

    2. You can only transact when the bank is open and make a physical trip to the bank, imagine there is a huge plunge last night during US hrs. you cannot withdraw outside banking hours.

    3. There are fees every month to maintain the account.

    4. Also subject to Counterparty risk (if UOB collapse you can’t get back the money)

    5. Also subject to currency exposure (if USD ccy collapsed, you cannot redeem the money invest with physical silver / gold)

    With all the above disadvantage, I’ll rather trade with a FX broker. XAG/USD
    What do you think?

    Reply
    • It is true to some of your points. No 3 applies to your FX broker too. You pay financing charges. No 4 is possible too, just like MFGlobal. No 5 likewise, XAD/USD is also valued in USD.

      Reply
      • Hi Alvin,

        UOB is more for longer term investor i personally felt, however the fee charge kind of contradict this point.

        Point 4 & 5 applies to both UOB and FX broker, both is Market marker as well…

        Some of advantage of FX broker is Leverage, and only charges via spread but no monthly fee (unless you trade on leverage which is minimal). UOB also charges spreads, moreover larger spreads than my FX broker. :-/

        Reply
  29. sad. there is no silver account in malaysia 🙁
    hope malaysian can soon buy silver through saving account too. many people in malaysia would like to buy silver but right now the only choice is buying physical silver.

    Reply
  30. Experienced almost the same service in UOB staff in Malaysia . Staff having good attitude and helpful but do things is very slow. Product knowledge is weak as well. After read this blog, make me think of is majority of UOB staff this way? I think they should improve on staff training. No choice and got to choose their service as they having the lowest rate in gold exchange ( Malaysia )

    Reply
  31. Something bothers me about UOB silver account. It is clear they are not buying physical silver. I asked them about it and they said they do not share such information with Customers. If they are not, we are exposed to counterparty risk. This means that if the silver price goes up a lot and they cannot pay us, they can legally default against us. Now I know UOB is very secure. But if they have taken a big bet against silver and the silver price spikes, they may well go under. They may not share such info wth us. But do they share it with MAS? Would MAS permit them to take such a big bet shorting silver? This is not transparent. Come October 1st (No GST after that), I am going to sell all my paper silver and buy physical.

    Reply
  32. Dear Alvin,

    After you opened a silver saving acc with UOB, do you track the price everyday?

    I bought some grams in gold saving acc to diversify my investment. Wanted to track the price everyday but I never get around to do it.

    I think studying the trend can help me decide to invest more or reduce.

    What do you think? Cheers and Thanks.

    Reply
    • How would “studying the trend” help you decide whether to invest more or less? No one knows what will happen tomorrow. Anything can happen. I buy metals as an insurance for possible high inflation, not to make gain from it.

      Reply
  33. Dear Alvin,

    Thanks! you’re right. I also bought it to hedge against inflation.
    But i wasn’t sure UOB gold prices follow the spot/global market or set by the bank. If it follows the spot market, how far is the gap i.e. how much profit do they make. So i can decide whether to buy from UOB rather than open market. Buy more if UOB does not take a huge profit of my gold account, buy less if the open market is more attractive (ie. buy more from open market). But now i think open market e.g. jewellery shops charge more due to workmanship, rental etc.

    Guess now that I have bought UOB paper gold, will have to just park it there and don’t bother about short-term fluctuation. After all, my objective was using it as hedge.

    Thanks!

    Reply
  34. You can buy silver in malaysia with maybank!
    For those ppl who is asking about buying silver in malaysia.
    Alvin,
    Thanks for writing this blog!

    Reply
  35. I would like to tell you one thing that , i have nearly research on the silver (international market)…I find that the bottom possivle to be the 10 usd per oz, Too pitty I can’t post
    the chart on this net…but thanks a lot …
    you are faster than their (uob) servie..ha…ha..!!

    Reply
  36. normaly how many percent of profit will you acquire …average..for these years of investment in silver??
    pleased to hear your voice!!

    Reply
    • I closed my silver savings account long time ago.

      I only hold silver coins now. My purpose is not to make money from silver, but as a store of wealth in the most dire situations such as war.

      Hence, it depends what is your investment objective.

      Reply
  37. I think your opinion is quite wrong …let’s say this evil metal have been rise from about what i say 15usd/oz las year end
    to about 17 in 2015 1st quater..but i think people who invest in this kind of investment should have some …
    experiance in investment beforehand.
    But if you don;t know Wave theory., ..you dont know how to handle..it !!

    Reply

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