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First National Bank goes gold crazy

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Rare NotesCoins

First National Bank (FNB) today announced it will be the first bank to sell Krugerrands online.

FNB has partnered with Rand Refinery Ltd to sell Krugerrands via its Online Share Investing platform.

Currently, Krugerrands are typically purchased at retail coin outlets presenting the purchaser with the security risk of not only transporting the coin, but then also finding a secure method of storing the coin at home.

FNB is offering ownership of physical gold with safe custody and a guaranteed buy back offer if the coin is held securely at Rand Refinery Ltd. Physical custody is also possible for those clients who prefer to hold their own coins.

"The launch of Krugerrands from FNB serves to enhance our Share Investing platform through the offer of an exciting asset class, physical gold. The offer, just like Share Investing platform, is designed to make investing in gold easy and hassle free." says Gusta Binikos, CEO of FNB Share Investing.

Customers will have a choice of trading Krugerrands through online and call centre channels. Some customers prefer to speak to a person when making investments and that’s why we have put the call centre facility in place. Investor education on gold and Krugerrands is offered by FNB on their website.

"The FNB Share Investing platform will benefit customers because they are buying through a safe, tried and trusted channel and a reputable supplier via our Internet banking platform. Gold is popular for its role as a safe haven asset. It is a stable, secure asset class, and a great hedge investment tool that provides good returns over long-term.

Today a one ounce Krugerrand coin is worth approximately R10 000. In 2001 the same coin will have cost you approximately R2 000. During 2010 the price of an ounce of gold grew by 29%. To this end, FNB hopes to give South Africans access to an asset that will help them diversify their portfolios and enables them to create wealth.

Krugerrands, made from 22 carat gold, are sought after across the world for their intrinsic value. There are over 46 million ounces of coins in circulation. Krugerrands are the most popular traded coin in the world today.

FNB will sell the full range of Krugerrands ranging from 1/10, 1/4, 1/2, and full 1 ounce coins


What is next Mandela coins?

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ABSA tried this too in the form of ETFs. I don't know if FNB will be more successful.


ABSA sold mainly to 'big investors' i.e. corporates which they no doubt gave a good deal. The man in the street wasn't really interested because after the set up fees, admin fees, management fees etc etc an Ounce cost you a R 1 000 more than you would pay at a dealer.


It all revolves around gold kept in 'safe custody' at the Refinery. ABSA used the same angle as FNB i.e. its too dangerous to collect the coins and store them at home. (Personally, I don't like negative advertising methods like these, as they produce only short term results.) The public isin't stupid, they either know or will quickly discover that dealers have safekeeping facilities too, mostly at no cost.


So its the usual story, it looks good until you sit down with a calculator, read the fine print and start making sums.


When ABSA first launched their version I stayed after work one night unpacking the offer, and it was quite shocking to be frank.

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Guest Guest

Never trust a bank (or ETF)


Never invest in gold or silver unless you can personally take PHYSICAL delivery of the gold or silver.


It is that simple.


Kind regards


Scott Balson

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