Unallocated metal accounts: everything an investor needs to know

Investment greetings, friends! Let's talk today about what an impersonal metal account is, what its pros and cons are, how to open and how to close compulsory medical insurance and how to generally make money on it. I have already partially touched on this issue in an article on investing in gold. But I decided to take a closer look at the aspect of opening an account for buying and selling “paper” gold, since compulsory medical insurance is more in demand than bars or coins.

How can you invest in precious metals?

There are three main ways to invest in precious metals, including gold. The first is to just go and buy a bar. In Sberbank, for example, this can be done without problems. Every whim is a bar for your money.

It sounds simple, but this is where the problems begin. First, liquidity. It is difficult to sell an ingot; banks often underestimate the purchase price, and jewelry stores will only accept it as scrap at the appropriate price. Secondly, the ingot will have to be stored somewhere. Somewhere - in a safe at home or in a bank. And these are expenses. And thirdly, when purchasing gold you will have to pay 20% VAT. That is, the profitability of such an “investment” is already minus 20% at the start.

There seem to be no plans to cancel VAT on gold in 2021, so...

The second way to buy precious metals is to buy investment coins. There are many pitfalls here, and it is better for beginners not to get involved in this matter. But in principle, you can’t make it sour. However, the coins will have to be stored somewhere, and a fair amount of time may pass between buying and selling.

The third way, in my opinion, is more optimal, to open a compulsory medical insurance – an impersonal metal account. It's like a bank deposit, only in gold, silver, platinum or palladium. And without interest, but with its own moments.

Opening a compulsory medical insurance is more practical than buying bullion. There is no need to spend money on a safe or worry about the safety of the bullion. And selling compulsory medical insurance (closing an account) is much easier. Less spread. And you don't need to pay VAT.

How does compulsory medical insurance work?

Now let’s learn more about what compulsory medical insurance is. Technically, this is the same deposit as a deposit in dollars or rubles. But in fact it is an investment instrument. You buy paper gold (or silver), wait for it to rise, and then sell it for a profit.

Compulsory medical insurance can be opened in almost any bank. You can even do it online, for example, at Sberbank. You sign an impersonal metal account agreement remotely, choose a “currency” - gold / silver / platinum / palladium - and become the owner of precious metals.

At any time you can purchase the required amount of metal, organize the sale of assets of any volume from an impersonal metal account (within the amount of savings, of course). You can purchase literally from 1 gram.

But there are some peculiarities that should not be forgotten.

What is a VTB savings account

The service checked the information, according to which it can be summarized: a savings account is a type of bank deposit that is opened to receive passive income in the form of interest. The difference between the two products lies in the conditions, which look like this:

The amount to open a savings account is any.
No validity period - money is placed in the account indefinitely, without a contract validity period.
Maintaining access to money - customers can deposit or withdraw money without restrictions from the credit institution.

The savings account “Kopilka” is an analogue of the savings account offered by Sberbank. In both cases, the most attractive condition for clients is the possibility of multiple withdrawals and deposits, which are not provided for in most standard bank deposits.

Taxation

There is no need to pay 20% VAT when buying/selling compulsory medical insurance. However, from the profit received on the metal account, you will need to pay NFDL. For example, you bought gold for 600 thousand rubles and sold it for 700 thousand. From 100 thousand you pay 13% - 13,000 rubles.

And here’s another interesting article: Review of “eternal portfolios” TRUR, TUSD and TEUR from Tinkoff Investments

Most banks are tax agents - they themselves calculate personal income tax and transfer it where necessary. But some are not, and then you will need to fill out the declaration yourself, calculate the tax and transfer it to the Federal Tax Service.

The obligation to pay income tax does not arise in two cases:

if the compulsory medical insurance has been active for more than 3 years, regardless of the type of metal and its amount;
if during the year you sold metal worth less than 250 thousand rubles.

At the same time, you still need to fill out a declaration and submit it to the Federal Tax Service. The deadline is April 31 of the following year. For example, you sold silver from an unallocated metal account on November 21, 2018 in the amount of 300 thousand rubles, of which 50 thousand rubles are net profit. This means that by April 31, 2021, you need to submit a 2-NDFL declaration to the Federal Tax Service and pay 6,500 rubles in tax.

Investment

For many years now, investing in gold has remained relevant and profitable for clients. Metal deposits are highly reliable due to their pricing policy. However, this type of investment has one significant drawback. Such deposits are not covered by the state insurance program.

If you have compulsory medical insurance, gold is stored in a special bank vault.

It should also be taken into account that servicing metal deposits is a more labor-intensive and expensive procedure than servicing foreign currency deposits. Therefore, it is very important to be especially scrupulous in choosing a bank with a high level of reliability and an excellent reputation. At the moment, one of such banks is VTB, which, moreover, offers the most favorable rate in comparison with its competitors.

VTB clients can control metal deposits thanks to a profitability calculator. To use the service, just follow the active link and indicate the following data in the boxes: name of the metal; deposit amount; period. The system will make the calculation automatically and display the received data on the screen in the form of an active and detailed diagram.

Types of metal bills

Most often, when talking about impersonal metal accounts, they mean gold (Au). Indeed, “paper” gold (and 999 fine!) is the main asset that, judging by the reviews, is bought through compulsory medical insurance.

But at the same time, most banks offering the service of opening compulsory health insurance allow you to buy:

Silver (Ag) – its price dynamics are more susceptible to changes than gold, so it is more popular with speculators than traditional investors. At the same time, the minimum purchase price for silver is much lower than for the same gold, so many novice investors in compulsory medical insurance prefer to start buying metals with silver.

Platinum (Pt) – Platinum is not particularly popular among investors. As, indeed, among jewelers. This metal is practically not used for jewelry, but is used in industry. And prices for it are formed, accordingly, in connection with industrial needs.

Palladium (Pd) - similar to platinum, is rarely used in jewelry, but is in high demand in industry. Especially in rocket science, microprocessor development and Tesla car production. Now prices for palladium are at highs and, apparently, are not going to fall.

When choosing the appropriate type of impersonal metal accounts, be sure to take into account the market situation so as not to buy precious metal at an inflated price. Yes, and it is worth aiming at long-term investments - as practice shows, sometimes several years pass before the price reaches the desired value for the investor to make a profit.

Competitors' offers

Considering that when making a deposit in a compulsory medical insurance account there is most often no interest rate, the offers of different financial institutions are almost the same. There are some features that should be taken into account when choosing a bank to open a compulsory medical insurance account.

In order to work comfortably, you should pay attention to the functionality of the financial institution’s website and mobile application. It is specified which metals are offered for purchase, as well as their required quantity to complete the transaction. To open a time deposit, you need to find out the interest rate (if it is provided).

How prices for compulsory medical insurance are set

Each bank sets its own quotes for impersonal metal accounts, based on the greed factor of the dynamics of supply and demand. When setting prices, they are based on data from the Central Bank - just as in foreign exchange transactions.

The Central Bank itself also does not take prices out of the blue. The price of the precious metal is determined by the London Stock Exchange every morning based on the results of trading. It is measured in dollars per troy ounce. One troy ounce is 31.1 grams. Historically, ounces have been used by jewelers to measure the weight of precious metals.

The Central Bank takes the price of gold in dollars, determined by the London Stock Exchange, then divides it by 31.1 and converts it into rubles at the current exchange rate. This is how the ruble price for 1 gram of metal is formed.

You can view the current rate here: https://www.cbr.ru/hd_base/metall/metall_base_new.

Then each bank, based on the price of the Central Bank of the Russian Federation, sets its own quotes. Here, for example, is the compulsory medical insurance rate at Sberbank on the same date (May 6, 2021).

And here’s another interesting article: Where to invest a million rubles: a review of options

Also keep in mind that the bank sets a spread - the difference between the purchase and sale prices. The larger the spread, the less profitable the deal and the longer you will have to wait until the price rises. Therefore, it is better to compare offers from several banking organizations and open compulsory medical insurance where the spread is the smallest.

Metal profitability calculator

The Sberbank website has a tool that allows you to determine the approximate benefit when opening an impersonal account. It is necessary to determine:

type of metals (1 or more);
duration of the deposit: for 1 month, six months or more, it is possible to choose an arbitrary number of days;
account opening dates: the time period can affect the price, since analysts usually make forecasts for changes in the price of precious metals for a long period;
expected deposit amount.

Sberbank often indicates which metals are currently available and when those that are currently unavailable will appear. This allows the client to plan their expenses and actions when trying to open compulsory medical insurance.

The calculator makes it possible to calculate the profitability of an investment instrument in certain types of precious metals.

Is it possible to exchange compulsory medical insurance for real gold?

OMS is a “paper” metal. If you buy gold on compulsory medical insurance, then you seem to have it - but you cannot touch it and take it away, nor can you sell it to another bank. And if you suddenly decide that it would be nice to turn your paper gold into real gold, then you can do it.

True, with a few caveats:

you will have to buy gold at the market price, which may differ from the cost of compulsory medical insurance;
you will have to pay VAT upon purchase (+20% to the price);
You will need to pay for the transportation of gold to the branch.

Plus, the resulting bars will need to be stored somewhere. At home under the pillow is not an option. One scratch and the ingot loses half its price. That's why you need a safe.

In short, you don’t need bullion gold or silver, much less palladium or platinum, if you decide to open a compulsory medical insurance. The metal account is designed to eliminate the disadvantages that are inherent in bullion, while allowing you to earn as if you owned it.

Terms of Use

Only people who already have a ruble account with VTB 24 can open and use compulsory medical insurance. This organization provides two options for purchasing metals:

Urgent – suitable for clients who need at least a small profit in the very near future.
On demand - the validity period is unlimited, and a person will be able to sell metals whenever he sees fit, taking into account the quotation.

Deposits using unallocated metals are not covered by the law ensuring payments for insurance of deposits of individuals, and therefore there is no guarantee of the return of funds spent on their purchase in the event of bank failure.
This should be taken into account and either take a risk, having clearly weighed everything, or abandon this idea and open a regular deposit, due to the risk that the rate of gold or another product will fall sharply.

Tariffs and cost of renting a safe deposit box at VTB 24

How to make money on compulsory medical insurance

No, well, it’s clear: in order to make money on impersonal metal bank accounts, you need to buy cheaper and sell more expensive. But how do you know when is the right time to enter and exit the market, and where will the price of gold or silver go in general?

Of course, predicting precious metals prices is an art, and no one will give you an accurate forecast. However, you can know some patterns and be guided by them.

Thus, gold is used to protect against the fall of the ruble. Why is that? I wrote above that gold prices are set on the London Stock Exchange in dollars. If the price of a troy ounce remains the same, but the dollar rises against the ruble, then, consequently, the price of gold against the ruble will also rise.

If the ruble strengthens, then, other things being equal, gold prices fall.

And here’s another interesting article: How to protect yourself from a crisis: putting together an anti-crisis portfolio for all occasions

In addition, gold is a defensive asset, and when the stock market is “stormy”, investors seek refuge in stable bonds or in gold. States are buying gold in the face of the threat of a crisis, which also moves the price up.

In principle, the same is true for silver, which generally repeats the somersaults of the gold rate. But, since it is actively used in industry, when there is a shortage, its price begins to rise. Keep an eye on mining companies - if they are not doing well with their production, this may indicate an impending shortage.

But there is a lot of silver. But platinum and palladium, not so much. Therefore, when their industrial demand increases, prices also rise. If enterprises reduce production, prices rise. If someone launches a new high-tech production or if Apple and Tesla open a factory in China, prices rise.

But it is not exactly.

Pros and cons of compulsory medical insurance

So, let’s highlight the main pros and cons of impersonal metal accounts. Advantages:

investments are available from small amounts - you can buy a minimum of 1 gram of gold or 5 grams of silver;
income is virtually unlimited - only by the increase in the exchange rate of the purchased precious metal;
there is no 20% VAT, as when purchasing an ingot;
Compulsory medical insurance does not need to be stored anywhere - it is in the bank;
There is no fee for servicing a metal account;
you can buy metal at a low price and sell it (partially or completely) at any time;
there are tax benefits;
you can open compulsory medical insurance online;
If you wish, you can exchange paper gold for real gold (although it is very expensive).

But I will also note the disadvantages of impersonal metal accounts, which also need to be taken into account:

no interest is accrued on compulsory medical insurance;
such accounts do not fall under the compulsory medical insurance program;
limited liquidity - you can sell paper metals only to the bank where you opened the account;
large spreads - sometimes you have to wait for years for the price to “work out” at least the spread;
the bank arbitrarily sets spreads, and sometimes they are not fair;
not all banks with good rates offer online transactions;
Sometimes you still have to pay taxes.

Well, the main disadvantage is that no one guarantees your income here. The price of the precious metal can either rise or fall. Therefore, you can either earn or lose money by investing in compulsory medical insurance. You need to be prepared for this.

What do you think about impersonal metal accounts as an investment instrument? My review: you can make money, but you need to know how and prepare for long-term investments. Not for a week, but for months and years. Perhaps it is more profitable to invest in gold ETFs or shares of gold mining companies? How do you think? Good luck and may the gold be with you!

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Is the deposit insured?

Gold, like most other precious metals, is a sustainable investment. This means that even when the currency rate falls, bullion is expensive. Moreover, there is always a risk of bank liquidation. Sberbank, from this point of view, is one of the reliable financial institutions. But, if we consider the situation theoretically, it may turn out that clients will lose their deposits and lose profits. This is due to the fact that the provision of compulsory medical insurance does not apply to the deposit insurance system.