Can I use my SRS to invest by purchasing physical gold or investing a gold savings account? (2024)

FAQs

Is it better to buy physical gold or ETF? ›

Whether to hold physical gold or invest in gold exchange-traded funds requires examining the trade-offs with each, including their liquidity, costs, returns, risks, and the practicalities involved. In general, gold ETFs offer some tax advantages and lower costs over time than trading physical gold.

Not just about tax benefits

Investing your SRS savings is one way to outpace inflation and earn potentially higher returns on your savings. There are a wide range of SRS-approved investments available, including funds, stocks, bonds, endowment plans, and fixed deposits.

When you think about investing in gold, don't restrict yourself to just buying physical gold, like coins or bullion. Alternatives to invest in gold include buying shares of gold mining companies or gold exchange-traded funds (ETFs). You can also invest in gold by trading options and futures contracts.

Higher fees plus IRS limits can hamper your Gold IRA returns. Getting emergency access to your funds can be challenging compared to the physical gold storage you control. Choose physical gold for shorter-term holdings you want to control. Pick a Gold IRA for long-term retirement savings and tax optimization.

"If you are wanting to invest in gold for the purpose of owning a usable form of tender other than the dollar, then no, ETFs will not offer the same safety of actual gold," says Kris Whipple, partner and financial advisor at Kristopher Curtis Financial.

Shares, REITs and ETFs

This is a popular SRS investment option because of the familiarity with Singapore stocks, and higher expected returns from REITs and stock investments. However, there are some notable disadvantages of investing your SRS in income instruments such as REITs.

You can invest all of the available funds in your SRS account. To check your SRS balance, you will need to check your SRS account with OCBC, DBS/POSB or UOB.

If you're wondering which SRS account is better, they're essentially all the same. You'll have access to the same types of investment products. The only differentiating factor would be potential sign-up benefits offered by the banks, if any.

One common way to purchase gold bars is through licensed retailers online. Prospective buyers can browse gold bar products on reputable retail websites such as the American Precious Metals Exchange (APMEX), JM Bullion, and Wholesale Coins Direct.

What is the best form to invest in gold? ›

The most direct way to buy gold is to purchase actual gold bars or coins, but these can be illiquid and must be stored securely. Exchange-traded funds (ETFs) and mutual funds that track the price of gold are also popular.

You must be at least 59 ½ years old to withdraw funds from a traditional gold IRA without penalty. If you withdraw funds before this age, they're considered non-qualified distributions and are subject to a 10% early withdrawal penalty (in addition to the tax you pay on any traditional IRA withdrawal).

It is taxed at your income tax rate at the time of withdrawal. Contributions are not tax-deductible. You do not pay taxes on withdrawals. You can withdraw funds from a Roth gold IRA at any time without taxes or penalties.

To obtain a free gold IRA kit, you typically need to reach out to companies that specialize in gold IRA services. Many of these companies offer free information kits to potential clients as a way to introduce them to the concept of investing in gold through an IRA and to showcase their services.

Throughout history, gold has been seen as a special and valuable commodity. Today, owning gold can act as a hedge against inflation and deflation alike, as well as a good portfolio diversifier. As a global store of value, gold can also provide financial cover during geopolitical and macroeconomic uncertainty.

Both digital gold and gold ETF may look very similar. The key difference is the physical delivery option by digital gold, while gold ETF does not have this option. However, choosing between the two depends on individual preferences and investment objectives.

Dividends: One of the biggest knocks on gold is that it doesn't pay any yield to investors. While that's true of the metal itself, gold miners—particularly the larger ones—do pay dividends, and an ETF investor benefits from that.

While you can buy gold bars from certain banks, it's much more common to use online dealers. You may also be able to buy gold bars from a pawn shop or individuals, and these sources may also offer gold coins. Even big-box retailer Costco is getting in on the action, offering one-ounce gold bars to its members.