Holding Gold in your RRSP

While the last decade was known as the decade of gold, many investors could not add this metal to their RRSP. This is unfortunate given that there are some benefits to holding silver and gold bullion in your TFSA or RRSP. Among them are safeguarding your investment from currency and stock market instability, and diversifying your investment portfolio. The latter is a proven growth method. Another benefit is that you have control over your retirement plan and can benefit from the market movements.

What types of investments can be held in a registered retirement savings account? You can hold shares, including those of small business corporations, along with funds of stocks, and stock. You can also hold debt such as investment receipts, mortgages, and debt obligations. Trusts are also eligible, including partnership units, royalty units, and unit trusts. Next come contracts, such as annuity contracts, depository receipts, and rights warrants. Finally, you are allowed to hold investment grade silver and gold bullion as well as investment grade silver and gold coins. There are a number of ineligible RRSP investments too. Precious stones such as gems fall in this category. Employee options to purchase stock are also an ineligible investment. The same holds true for listed personal property, including antiques and works of art.

If you have decided to diversify your portfolio by adding gold to it, you can shop for an investment dealer that offers this service. Barret Capital is one such dealer that offers gold with guaranteed weight and purity, which is minted by the Royal Canadian Mint. Security is taken care of by storing gold at the largest Canadian Brinks location. Gold is protected by armed guards and kept under 24/7 surveillance. Three independent alarm firms monitor it, and the vaults’ contents are completely and fully insured.

The major banks in Canada are a safe bet or you may buy a certificate from a bullion dealer. The usual price of a certificate starts at 3 cents an ounce a day if you choose to buy 2,000 ounces. If you just hold a small amount, you can rent a safety deposit box at your bank.

According to some, it is not a good idea to invest in gold bullion or certificates that represent interest in the latter. Critics point out that this does not generate income and goes with cash drain for storage, insurance, and management. These costs can be paid through a premium or directly. As an alternative idea, investors can buy gold mining stocks which can generate income. Other critics argue that precious metals are volatile investment instruments and not suitable for risk-averse investors. At the same time, gold has been regarded as a form of insurance policy against the crash of the capital markets.

Those who still want to invest in gold should keep in mind some requirements for gold to be considered investment grade. Coins should be minted by the Royal Canadian Mind and be at least 99.9 percent pure. Thus, other coins are not RRSR-eligible such as Chinese Gold Panda coins or Gold Buffalo coins. Bullion bars can also be held in a registered retirement savings account, but the refinery that produced them should be accredited by the London Bullion Market Association. The bullion bar should have a hallmark containing the weight and purity of the bar, along with the name of the refinery.