Secure Storage Options for Peace-of-mind
Security, convenience, and cost-effectiveness are all important factors to consider when choosing a storage option for diamonds and any other valuable hard assets. There are 4 primary viable options that offer varying degrees of each: private vault, custodial vault, bank safe deposit, and storage in a safe at your residence.
Australian Diamond Portfolio recommends private or custodial vault storage for a number of reasons outlined below, and partners with Guardian Vaults in Sydney and Melbourne to arrange private vaulting and insurance for our clients. However, the decision on how to store your investment is entirely up to you.
Private Vault Storage: The Recommended Solution
There are several high-security, purpose-built vault facilities in Australia that specialise in private safe deposit services. Each offers safety deposit boxes that can be leased on an annual and sometimes monthly basis. Boxes come in various sizes that are suitable for storing diamonds, as well as precious metals, art, and other hard assets. The security procedures are sophisticated and combine high-tech identification systems and complex access protocols in facilities that are heavily guarded with advanced layers of security. In these facilities, the contents of your safety deposit box are private and can only be accessed by you.
Most operations also provide added services like insurance, audit or inventory statements, bullion transfers, and help to arrange shipping if needed.
Fixed storage costs
Lease fees are based on the size of the box being used, not on the value of the contents being stored, making it cost-effective. Fees start at approximately AU 255 per annum.
Most vaults offer individual insurance for the nominated value of your contents, arranged with a specialist insurer. On high-value assets, the premiums are vastly lower than trying to insure under your home contents policy – the high security rating of the facilities makes them a much lower risk to underwriters.
Exclusive, direct access using a personal key. Only you and those that you personally give access to can access your box.
Assurance of privacy
You control who knows the contents your safety deposit box and who knows of its existence.
Maximum protection is provided for your valuables in the vault and transactions made within the facility are also highly secured due to guard monitoring, surveillance, alarms, and secure access protocols.
Private ownership means that the facility has no ties to banking or government authorities, and as such is not subject to the same reporting requirements, regulations, or permissions to access your box that banks have. Third party access will only be allowed with issued search warrant or with your own authorizations.
Custodial Vault Storage
Private vaults may also lease safe deposit boxes by custodial arrangement, a service offered for clients that cannot visit or manage the contents of their vault in person. Title to the contents of the box are yours and it still provides an independent storage solution, but the keys to the box will be held by the vault staff, who carry out all transactions involving your deposit box on your behalf as requested.
The logistics and coordination of items to and from your box are carried out according to strict protocols and fully documented to maintain the integrity of your box contents. This may include having multiple staff required to be present anytime your box is opened and multiple signatories, restricted access keys, etc.
This option does not come with the same level of privacy as the private vault, but your information is still treated as private. There are also handling fees as this option requires additional services. Before making a final decision to use the custodial vault storage, ensure that you find out sufficient information about the security protocols of the organization, their terms and conditions, authorization procedures and so on. Thus, you will be assured that the organization can cater for your storage, privacy and security needs.
Bank Safe Deposit
Several banks branches in Australia offer safe depository facilities including safe deposit boxes and personal safes. While cost-effective, they tend to be reserved for banking clients only, and have long wait lists due to limited facilities. They have restrictions as to the weight and size of items that can be kept in the boxes, may restrict storage of some assets such as cash, and access times are restricted to banking hours. The advantage that this option is that the prices are usually fair due to competition, and the locations of the banks may be more convenient if located close to you.
Fixed Storage Costs
Cost effective and fees usually come in at a little less than private storage fees.
You will need to arrange your own insurance; most bank safe deposit boxes do not offer the option to insure their contents, which might raise the question of what happens if the contents of the box disappear.
The available security protocols vary among the banks; therefore you should make careful enquiries before deciding on what bank to use. The identification required to access a safety deposit box is usually a piece of photo identification.
Banking Law Regulated
Safety deposit box contents in banks fall under banking laws, regulations, and reporting requirements. Thus, in a situation where the bank falls into financial crisis, your assets may be temporarily inaccessible. The bank also reserves the right to prevent you from accessing your box, restrict the items that you can store and they can also keep a copy of your access key without your permission.
Using a home safe
This may seem like a cost-effective option at first but on taking a closer look, it’s arguable that the risks of storing your diamonds at home far outweigh the benefits. The cost of a high-tech safe can be quite exorbitant and also, the cheaper safes can be easily burgled. Storing your diamonds at home also exposes you to the risk of physical harm if your home is attacked by burglars and you are threatened to grant them access to your safe. The cost of insuring some high-value diamonds far outweigh the cost of storing them in insured facilities as well. However, for those who have their diamonds set in jewellery for frequent wear, the convenience offered by a home safe can often be the most important factor. At the end of the day, it’s a personal choice.