Frequently Asked Questions

You may contribute to your facility by making lump sum deposits via EFT into your facility from time to time. There is no minimum amount required for EFT deposits. If you prefer electronic collection of the lump sum from your account, this can be arranged.

South African client’s may also set up a regular debit order contribution to run off your bank account. These are available for deduction dates 1 and 15 of each month. The minimum contribution for debit orders is R500 per month.

Cash deposits are permissible and can be made at any Nedbank branch. Client’s are advised that banks levy a charge for receipting cash deposits.

The cash component of the facility is typically not a large amount (under 1 oz of gold) as savers are accumulating cash toward their next ounce of Gold purchase, or comprises the leftover cash for investors. Typically small amounts attract very little interest for deposits with banks. SA Bullion has negotiated a preferential interest rate for cash held within our facilities. The current interest rate is 5% and is payable by our banking partner Nedbank.

Your Krugerrands are vaulted and held in secure custody under your title on site at Rand Refinery Limited in Germiston, South Africa. Rand Refinery Limited is one of the largest and most secure gold refineries in the world. ( www.randrefinery.com )

SA Bullion reconciles its client register and holdings with Rand Refinery daily. A quarterly physical stock audit is undertaken in the vault and is conducted by PwC. In addition, SA Bullion client’s enjoy the convenience of being able to place a telephone call to the treasurer at Rand Refinery Limited who will confirm your Krugerrand holdings immediately.

Yes, comprehensive insurance cover over your gold holdings is provided by Lloyds of London and is included in the annual premium payable to SA Bullion.

You can instruct SA Bullion to sell your Krugerrand/s by completing a redemption form. SA Bullion will then facilitate the sale of your gold to the South African Reserve Bank at full market value with no charges. Settlement into your selected bank account occurs within 3-4 business days.

Yes, you may elect to take physical delivery of your Krugerrands at any time. Should you take physical delivery within the first two years an early exit charge may be levied. This charge may not exceed 4% (i.e. two years of premiums). No exit charges are applied after the elapse of two years. See further detail on Pricing FAQ.

Delivery is via an insured courier service – these charges are for the client’s account. SA Bullion will provide a detailed quotation in the event of physical deliveries charges upfront

Due to security constraints, client’s may not present themselves at Rand Refinery’s Premises to receive their gold bullion holdings. All physical deliveries take place via insured courier.

Delivery is via an insured courier service – these charges are for the client’s account. SA Bullion will provide a detailed quotation in the event of physical delivery charges upfront.

Yes, SA Bullion is approved by the South African Reserve Bank to conduct business with non-residents. Foreign international residents are assisted with the exchange control processes by SA Bullion.

Yes, provided FICA documentation is provided at application stage, parents and guardians of minor children may open facilities held in the name of their minor children.

Yes, SA Bullion provides IT3(b) certificates for interest earned on cash held in the facilities, as well as IT3(c) certificates for capital movements on the facility

Counterparty Risk
Title owned bullion Krugerrands will not expose you to any counterparty risk as you own your gold outright. Other forms of indirect gold ownership which involve a counterparty will expose you to credit risk and risk that the counterparty goes bankrupt i.e. unallocated gold accounts, gold ETFs, gold futures contracts.

Market Risk Risk
All assets are affected by prevailing economic and financial conditions that create price changes. This is referred to as market risk. The price of gold can move either up or down and your investment in physical gold will expose you to market risk.

Liquidity Risk
Liquidity risk is the risk that you are unable to find a buyer for your bullion Krugerrands. As a client of SA Bullion you will enjoy perfect liquidity when you decide to sell your Krugerrands. SA Bullion will facilitate the sale of your Krugerrand/s to the SA Reserve Bank who is the guaranteed buyer of your Krugerrands.

Unlike gold bars, the bullion Krugerrand offers you the following advantages; It is legal tender and attracts no VAT )This is a 15% cost-saving if you are a SA Resident)
It is minted by the South African Mint and underwritten by the South African Reserve Bank which gives you complete assurance of its gold content.
The SA Reserve Bank stands as the guaranteed buyer, at full market value, of your bullion Krugerrands

Krugerrands are 22 carat coins, containing one full ounce (31.1 grams) of 24 carat gold and as well as a further 2.83 grams of copper. As a traditional metal used in gold coins that serve as currency, copper hardens the coins, enhancing their durability and strength. This further makes the Krugerrand an ideal and tradable investment vehicle.

We deal exclusively in the 1 oz bullion Krugerrand. The reason here is that the refining and minting premium becomes disproportionately higher on smaller denominations. The 1 oz gold bullion KR is thus the most attractive investment instrument for physical gold ownership in South Africa. To illustrate; SA Bullion client’s pay a 3% refining and minting premium for 1 oz Krugerrands (KR), whereas the ½ oz KR bears a 7% premium, the ¼ oz KR a 9% premium and the 1/10 KR an 11% premium. This results in the smaller denominations being much less attractive for investment. As a mainstream investment manager of physical gold, we ensure lowest friction charges for our client’s by dealing in the 1 oz KR exclusively.

As the Krugerrand is so easily and well recognised, buying and selling Krugerrands internationally is simple and straightforward. They can be bought from and sold to thousands of coin dealers, banks and their branches worldwide. This also makes them an investment with high liquidity.

Provided the intention at acquisition was to hold Krugerrands ‘for keeps’ – it is the view of the SA Revenue Service that gains from the sale of Krugerrands will be considered as a capital gain and treated accordingly.

Non SA residents may export up to 15 Krugerrands to be supported by the prescribed customs declaration. This is provided they were acquired with foreign currency. The SA Reserve Bank is willing to negotiate this restraint and deals with each request on a case by case basis. SA residents may export Krugerrand coins up to an amount of R30 000 as gifts to non-residents subject to the completion of the prescribed customs declaration. South African residents may make use of their annual R1m discretionary allowance to apply to the SA Reserve bank for export of Krugerrands. The R10m foreign capital allowance is also available to SA Residents that are in a possession of a tax clearance certificate, application must be made to the SA Reserve Bank for an exemption to export Krugerrands in lieu of this allowance. Such application should be completed before travel.

Yes, comprehensive insurance is held over your gold holdings through Lloyds of London and is included in the annual premium payable to SA Bullion.

Bullion Krugerrands are valued solely for their gold content. Proof Krugerrands are valued based on some collectible or numismatic value. SA Bullion deals exclusively in legal tender bullion Krugerrands.

The advantages here are:
- Priced at 3% above gold price always (No indeterminate ‘collectible’ value assigned)
- They are legal tender unlike collectibles and therefore do not carry a VAT charge
- Liquidity is guaranteed on bullion KR’s, not so for proof Krugerrands

Your Krugerrands are purchased at the Live Spot Price plus a 6.5% refining and minting premium. The premium covers the cost of refining the gold ore, creating the blank and striking the Krugerrand coin. This premium is a highly discounted rate exclusively available through SA Bullion and is paid to Rand Refinery Limited at the time of purchase of your Krugerrands.

You can expect to pay the following premiums on our facilities:
An initial premium of 1% of the investment amount for deposits into the facilities we provide.
An annual premium of 2% per annum which covers the cost of Vaulting, Insurance & Administration.
Premiums are negotiable for amounts in excess of R1m.
Accredited Financial Advisors may charge an initial premium of up to 3.5% of the investment amount. This would have to be agreed between the client and their accredited advisor.
*All premiums are VAT exclusive.

SA Bullion client’s pay zero premiums when selling Krugerrands held within our facilities and when withdrawing cash from their facilities.

In the event a client wishes to take delivery of gold bullion within 2 years from investment entry date, then SA Bullion reserves the right to charge an exit premium.

This charge may not exceed the amount of premiums that would normally accrue to SA Bullion over a 2 year term in respect of gold held within the facility. Client’s who elect to take physical delivery after 2 years may do so without any charge.

Illustration:

Client X acquired 1 gold bullion Krugerrand within The BullionGold Facility at a price of R20 000.

Custody:
The ongoing premium for custody vaulting, insurance and administration is 2% per annum. For client X this equals R20000*2% = R400 pa or R33 pm. This is calculated on the market value of gold held and is levied monthly in arrears.

Scenario 1:Client X elects immediate physical delivery: Exit Charge = R20 000*4% = R800 due

Scenario 2:Client X elects physical delivery after 1 year. Client X has already held the gold bullion for 1yr and has thus paid R400 in premiums. Exit Charge = Max premium of 4% [R800] less any premiums paid to date [R400] = R400 due

Scenario 3:Client X elects delivery after 2 years of acquiring his gold bullion. No premiums apply after 24 months of custody with SA Bullion.

Delivery is via an insured courier service – and these charges are for the client’s account. SA Bullion will provide a detailed quotation in the event of physical delivery charges upfront.

Yes, SA Bullion is an authorized financial services provider (FSP licence numbers 21984 & 45151), SA Bullion is regulated by both the SA Reserve Bank as well as the Financial Services Board. SA Bullion is subject to compliance with the following Acts:

Financial Intelligence Centre Act (38 of 2001) - FICA
Prevention of Organised Crime Act 121 of 1998 (POCA)
Financial Advisory & Intermediary Services Act, 2002
General code of conduct for authorised financial services providers and representatives
South African Reserve Bank Act (Act 90 of 1989)

SA Bullion only operates in the primary market for bullion Krugerrands. SA Bullion client’s acquire newly minted Krugerrands only. Client’s are thus assured of no possibility of counterfeit, contamination, damage or wear and tear to SA Bullion supplied Krugerrands. In keeping with this, we do not acquire gold bullion from the general public.

A financial advisor may apply to become an accredited intermediary of SA Bullion. This happens via an intermediary agreement between SA Bullion and the financial services provider. Please see our partnership page for further information.

Yes, SA Bullion is approved to conduct business with non-residents of South Africa and holds an export licence in respect of physical deliveries abroad.