There are two different types of pooled silver accounts or certificate programs, allocated and unallocated.
Allocated accounts are opened when a client requires specific metal such as gold or silver bars and coins to be stored separately and a detailed account of the physical characteristics of the precious metal, such as weights and assays, is recorded. The client has full title to these assets and the dealer or mint simply holds these assets on behalf of the client as a custodian. Usually there are storage fees to be paid on the holding and sometimes other fees also.
There are a number of dealer that provide for allocated precious metal accounts.
A good example is the Perth Mint. With the Perth Mint Certificate Program (PMCP) You own title to specific coins and/or bars, which are placed in a physical form in the PMCP storage facility. You also meet the quoted precious metal cost, fabrication charges and storage fees at the time of your purchase. The storage fees are based on the purchase value of your precious metal, so your storage costs will not rise if precious metal prices increase and the annual storage fees are collected every three years in arrears, with one year's storage payable at time of purchase.
Most of the dealers of allocated silver accounts operate this way with some variations.
This is quite different in that the precious metal is not segregated or separated from other account owned metal. Instead it is pooled. Each person owning some of the pooled precious metal shares that with all the others also owning a share of the pooled precious metal. However, it is the most convenient, cheapest and most commonly used method of holding metal.
Again using the Perth Mint as an example. The PMCP gives you legal title to precious metals held by The Perth Mint on a unsegregated (unallocated) basis. The Certificate is in your name and identified by a Certificate number. The PMCP is also the only Government Guaranteed certificate program in the world, making it one of the safest ways to own precious metals.
When you buy unallocated silver from the Perth Mint, they will issue you a Certificate confirming your purchase of the requested precious metal, which is stored at the Mint on your behalf.
With unallocated silver, usually the units of these accounts are one ounce of silver based upon a .995 LGD (London Good Delivery) .999 fine LGD silver bar. Based on the LBMA. The LBMA is a small market in terms of transacting participants, but since it operates as an OTC market, the transaction levels on the LBMA dwarf those of any other physical gold market in the world. Note the IMF statement earlier that nearly all loans and swaps involve unallocated gold (i.e. not audited).
Many of dealers and mints around the world operate in a similar way, again with slight variations as in the allocated accounts.
The PMCP offers investors a unique range of precious metal storage options on attractive terms:
Account opening minimum: USD 10,000 (AUD 5,000 for Australian/New Zealand residents)Some of the advantages of allocated and unallocated silver accounts include confidentiality, low cost security, flexibility and, in many cases, no sales or other taxes are levied (Check with your own financial advisors as far as the tax laws in your country are concerned) for one's precious metal assets
Minimum subsequent purchases or sales: USD 5,000 (AUD 5,000)
All Certificates are purchased through a reputable international Approved Dealer network a list of which is on the Perth Mint website.
The advantage with the Perth Mint, which other metal storage facilities do not have is that All precious metal held by the Perth Mint Depository in both allocated or unallocated storage accounts is covered by a Western Australian Government Guarantee.
Appealing to many investors with the Perth Mint Certificate Program is that transaction confidentiality is provided for under the Gold Corporation Act 1987 and the Perth Mint Certificate Program's administrative procedures.
The Perth Mint Certificate gives you legal title to precious metals held by The Perth Mint on either a segregated (allocated) or unsegregated (unallocated) basis. The Certificate is in your name and identified by a Certificate number. The PMCP is also the only Government Guaranteed certificate program in the world, making it one of the safest ways to own precious metals.
If you want more information about the Perth Mint Certificate Program (PMCP) you can locate a dealer here: www.perthmint.com.au/cp_dealers.aspx
All of these types of allocated and unallocated silver accounts offer an alternative to the problematic issue of storing large amounts of silver or entering the more economically dependent silver exchange traded funds or, even worse, silver futures!