For those of you walking to into Canadian banks lately, you will notice that some of the Canadian banks have started marketing the selling of gold and silver bullion. It sounds really great to be able to purchase bullion from your existing bank.

However….

If you explore further you will find:

  • The premiums are outrageous, they are much more expensive than Canadian Bullion Services
  • An example; AS of Oct 28 2013, CIBC is currently charging approximately $5.50 premium  per ounce on Silver Maple Leaf coins compared to Canadian Bullion Services which are charging approximately $3.00 premium per ounce on Silver Maple Leafs. CIBC is currently charging approximately $112.00 premium per ounce on Gold Maple Leaf coins compared to Canadian Bullion Services which are charging approximately $59.00 premium per ounce on Gold Maple Leafs
  • You can only buy up to $9,500 CAD in any 48 hour period
  • You are forced to buy in Canadian Dollars and the exchange rates are awful!  Three to four percent above the futures price compared to the one percent fee when dealing with CBS, which unlike the banks accepts US funds or Canadian.
  • The other banks are not much different in there extreme pricing and exchange rates
  • The banks charge an administrative fee whereas CBS does not.
  • The banks offer very little if any customer service whereas CBS provides weekly newsletters, one on one communication with bullion specialists
  • The banks make the whole process quite difficult and confusing whereas CBS have worked very hard to make purchasing bullion easy.
  • The banks have an extensive application process which requires disclosing your Social Insurance Number and keep this info on file which may be shared with government agencies.  CBS requires very little information and do not ask for SIN for online orders and only provide information to government agencies if a police investigation is underway about a specific client.

 The high premiums charged by the banks remind me of converting  money from Canadian dollars to U.S. Dollars or vice versa. Other than the airport, probably the worst place to convert money is at the local branch of a bank. The best place to convert money is a specialized FOREX dealer.  It goes the same for buying gold and silver bullion. If you want the best price and superior service, you need to buy from Canadian Bullion Services.