UPDATE: August 3, 2016Bitgold was acquired by Goldmoney.com a few months ago and as of August 2016, the Bitgold brand has been replaced with the Goldmoney brand. Everything else is the same – the same people are running the company, etc. The change is just a brand consolidation. If, like me, you already had a Bitgold account, the only difference you’ll see is a brand name change on your account page. Everything in my review still stands….

A question I’ve seen asked quite a bit lately is: What is BitGold? People have heard something about it somewhere, maybe in a financial piece on one of the news channels or maybe they saw some reference to it online. Whatever the source, there’s a growing awareness that this company exists and people want to know more about it.

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BitGold/Goldmoney is a Canadian company that allows you to buy gold, save it, redeem it and send remittances to other account holders. This video explains what BitGold/Goldmoney is all about in more detail:

Daryl’s Goldmoney Personal Account (Formerly BitGold) Review

One problem for gold investors is that they can only buy coins or bars of certain sizes. The smallest coins are 1/20 oz and cost about $80 (early 2016). If you’re a small investor, even those coins might be too expensive for you. Plus, the premiums (what you pay above the Spot Price) are higher on these coins. A Goldmoney Personal account (BitGold) removes that obstacle.

Buying Gold

A Goldmoney Personal Account (BitGold) allows you to buy any amount of gold with Bitcoin, wire transfer, SEPA, credit/debit card or China UnionPay. You can spend as little as a dollar or go as high as you like.

BitGold Deposit Pptions
The Deposit Options

Gold is sold by the gram rather than by Troy Ounce (there are 31.1 grams in one Troy Ounce). But with a Goldmoney Personal Account (BitGold) you can buy fractions of a gram rather than being restricted to multiples of one gram. When you buy, you’ll receive gold matching the amount of money you want to spend. You can also select which of seven vaults around the world you want to have your gold stored in:

BitGold Vaults
BitGold Vaults around the world

The price you pay for gold is always within 1% of gold’s spot price; i.e. the gold premium is 1%. If you buy gold from a regular bullion dealer, you’ll typically pay a premium of 7% plus, so Goldmoney’s rate is very good.

If you buy with a credit or debit card, there is a 2% processing fee charged. So if you wanted to buy $100 worth of gold with a card, 98% (in this case $98) would be used to buy gold.

The other forms of payment do not incur any additional fees.

UPDATE: If you’re in the EU, and you use a credit/debit card to buy gold, there will be additional charges imposed by your bank for a foreign currency transaction. These charges will not be taken from the money you deposit into BitGold, but will appear as an additional charge on your card statement. In mid-April (2016), BitGold started processing orders placed with Euro cards as local currency transactions so additional foreign currency transaction fees will no longer be charged by banks. More on that in this post.

There are no storage fees charged for your gold unlike with other Bullion vaults which charge annual fees of 0.12% to 1%. Some of these vaults require minimum daily, monthly or annual fees, regardless of how much gold you have stored. A Goldmoney Personal Account’s (BitGold) storage is free.

Another big plus is that every gram of physical gold in your account is your property. It is fully reserved, allocated, and redeemable under Bailment Law in Canada. Whenever you have gold stored in a vault, it’s important that you use allocated storage. That way, physical gold is held in your name.

I now regularly buy a gram or two of gold from my Goldmoney Personal Account (BitGold). Buying is so easy and can be done from your PC 24/7.

Pros:

  • It’s very simple to buy gold
  • Many payment options are provided, including Bitcoin
  • You can set up automated payments, so you can turn your account into a gold savings account.
  • Storage of your gold is completely free, so no hidden charges here.
  • You get fully reserved and allocated storage with redeemable gold.
  • There’s 100% insurance coverage on your physical gold value through the London market by The Brinks Company.
  • Vaults are secured and administered by Brinks, the World’s largest and most prestigious security firm.

Cons:

  • There is an additional 2% processing fee for ordering with a credit/debit card
  • There’s no option to buy via PayPal
  • There can be a delay of a couple of days before credit card orders are credited to your account.

Remittances And Transferring Money

Sending Remittances With BitGold

One of the usual ways of transferring money between two parties is via Western Union. It’s commonly used by people who’ve moved to other countries when sending money to the folks at home. But Western Union charge almost 10% on such transactions.

Another way to transfer money is via PayPal which is certainly cheaper than Western Union. And yet another method is to send Bitcoin from one person to another. This method has practically zero fees but Bitcoin is not well understood widely and can be cumbersome to use.

Into this void in the remittances market steps BitGold/Goldmoney. One account holder can transfer gold to another account holder at zero cost. This, and how easy it is to open an account would seem to make it a no-brainer for anyone who regularly transfers money.

Just to be clear, there are no account fees and no commissions charged on money transfers and you can transfer gold anywhere in the world.

Pros:

  • Money transfers are free – no account or commission fees.
  • It’s easy to open an account (you don’t have to deposit any funds) so sending/receiving gold to/from another account is as easy as it gets.

Cons:

  • BitGold/Goldmoney is an online platform so if access to an internet-connected PC is a problem, it might not be right for you.
  • You do need to have a account in order to receive money transfers.

The Prepaid Mastercard

Goldmoney also offers a prepaid debit card, backed by Mastercard, to its account holders. You need to load up the card from your account so in the event your card is stolen, your entire account can’t be cleared out.

Applying for the card was the first thing I did after depositing funds into my account. It arrived about 2 weeks later. The only downside was that a lot of the gold ink on the raised card number and details rubbed off on the paper the card was wrapped in.

The BitGold PrePaid Card
The BitGold PrePaid Card

There’s no charge for your first card but there’s no indication of what fee is charged for subsequent cards. Most people would look for just the one card anyway.

If you’re wondering why this is a GoldMoney branded card rather than BitGold, it’s because GoldMoney Inc is the parent company of BitGold Corp (this was the case even before the BitGold rebranding).

Other good news: there’s no monthly fees, interest payments or credit checks to worry about. Cards are available in USD, GBP or Euro currency.

There is a fee of 1% to load your card. But, since the card is backed by Mastercard, that means you can use it to spend your gold at over 33 million retailers online and offline, worldwide.

There is a $2.50/€2.50/£2.50 fee to use the card to withdraw money from an ATM. The full fee schedule is here.

Pros:

  • No credit checks means that anyone with an account can have a prepaid card.
  • There are no account fees or interest payments to worry about.
  • The card provides a convenient way for you to covert your gold to cash with zero hassle.
  • As the card has to be loaded with funds from your account, your entire gold holding isn’t at risk if your card is stolen.

Cons:

  • It takes up one more slot in your wallet. 🙂
  • Obviously, you need to load the card when gold has a good price in your card’s currency. Ideally, you’d only add funds to the card when gold commands a higher price than you paid for it (plus 2-3% to cover any original purchase fees).

One thing I’m not sure about, and you should contact an accountant about this, is if you use the card to spend gold when it’s at  a higher price than you bought it for, then you’re likely to be liable to pay tax on the profit. I haven’t used my card yet. I got it as something of an insurance policy, to use if the price of gold rockets or, more accurately, the purchasing power of my currency drops.

A Gold Savings Account

You can set up automated payments to regularly add funds to your account. This hands-off approach has the benefit of forming a regular savings plan, but you’ll never know what price gold is at the time money is transferred into your account.

Pros:

  • You don’t need to remember to deposit funds into your account.
  • You set up a regular savings plan in gold rather than in currency.
  • Buying at a regular interval smooths out the highs and lows in prices over time.

Cons:

  • You won’t know what price gold will be at when funds get deposited to your account. They could be high, they could be low.
  • If you’re the type who wants to buy at what you believe is a good price, then manually depositing money into you account is a better option.

Cashing Out

There will come a time when you’ll want to convert gold back into your local currency. When cashing out, the price you get for your gold will always be within 1% of the gold spot price. BitGold/Goldmoney provide several options for redeeming your gold, but each has its own charges.

Redeeming Gold From BitGold
Redeeming Gold From BitGold/Goldmoney

Bank Transfer:

Sell your gold (or part of your holding) and have the funds wired to your bank. A fee of 0.5g of gold is deducted from your gold. At today’s (April 2016) rates, that would cost about $20 (with gold at $39.84 per gram).

As the price of gold rises, then the fee in your local currency will rise. So if the price of gold rose to $100 per gram, a bank transfer would cost $50. But bear in mind that the amount of currency you’re transferring out would be higher too.

Prepaid Card:

With this option, you load currency onto your card, not gold. So you convert gold to your card’s currency at today’s rate and that gets credited to your card.

If the price of gold is higher tomorrow, the funds on your card remain the same. Likewise, if the price of gold drops, the amount on you card also remains the same.

It’s important to remember that a prepaid card is to spend currency (USD, GBP or EUR) and not gold directly. So gold is not converted to currency at the instant you use your card.

There is a 1% fee to convert gold to currency and load the card with that currency. There are no fees to use the card as a debit card. However, there is a flat $2.50/€2.50/£2.50 to use the card in an ATM.

Physical Redemption:

Redeeming Physical Gold
Redeeming Physical Gold

If you want to hold and store your gold yourself, you can always physically redeem it. The minimum size of gold coin you can redeem is a 1/20 oz Gold canadian Maple Leaf coin. If you have a larger amount of gold in your account, you can also redeem for larger sized coins. If you want gold bars, you have two choices – the 10g gold cubes (approx. 1/3 oz) or 1Kg bullion bars. This is the full list of items you can redeem your gold for:

10g BitGold GoldCube
1 oz Gold Canadian Maple Leaf
1/2 oz Gold Canadian Maple Leaf
1/4 oz Gold Canadian Maple Leaf
1/10 oz Gold Canadian Maple Leaf
1/20 oz Gold Canadian Maple Leaf
1 oz Gold American Eagle
1/2 oz Gold American Eagle
1 oz Gold Austrian Philharmonic
1/2 oz Gold Philharmonic
1 oz Gold Australian Kangaroo
1/2 oz Gold Australian Kangaroo
1 oz Gold South African Krugerrand
1/2 oz Gold South African Krugerrand
1 Kilo .9999 Gold Bar
10 g .9999 Gold Bar
1 oz Silver Canadian Maple Leaf
1 oz Silver Bar
10 oz Silver Bar
100 oz Silver Bar

The standard redemption fee of 1% plus 0.5 g of gold applies. But, because these are physical items, additional shipping and insurance fees will also be charged. The fees will be calculated and displayed when you place your redemption order.

Like depositing funds, this is also a very easy process. Here is an example redemption order for a 1/4 oz Canadian Gold Maple Leaf coin:

Redeeming Gold for Gold Coins

While I like the option of redeeming BitGold/Goldmoney for physical gold, the shipping fee on a small item like this is too high for my liking. The redemption fee is always a flat 0.5g so becomes less of an issue the more gold you convert.

Likewise, the shipping fees should be more economical the more gold you redeem in one go. Shipping fees will also depend on where you live as Goldmoney do ship internationally.

Account Maintenance

Account Security

Since you could have a large amount of gold in your BitGold/Goldmoney account, it’s good to see that they offer a 2-Factor Authentication option as added security to access the account. Should your username and password be discovered and stolen by malware, that additional level of security will protect your account.

You are able to build a balance of up to 25 grams of gold (about 4/5 oz) without providing any ID info. But if you want to buy more gold than that, you will need to provide some government-issued photo id documentation to verify you are who you say you are.

You’ll have to submit Identity documentation if you want to apply for the prepaid card, regardless of the amount of gold in your account.

Account Screen

This is what a BitGold account screen looks like (this is an example screen taken from their website [before the rebrand] – click the image for a larger view):

Example BitGold Account Screen

It’s a clean, well designed interface with all the information neatly presented. Above is the Transactions page. When you log into your account, you see the Overview screen which has three sections:

  1. Vault – which lists the vaults you have gold stored in and the amount in each vault
  2. Cards – if you’ve applied for and received a prepaid card, it will be listed here along with the card’s currency and balance
  3. Recent Activity – this lists the last 5 transactions carried out in your account.

Daryl’s Overall Conclusion

I really like BitGold/Goldmoney. It is the cheapest way to buy gold that I know of. You might be able to pick up gold coins for the spot price at a coin dealer but it’s very hard to beat BitGold/Goldmoney’s 1% premium. Online bullion dealers charge a premium of about 7% by comparison.

Your gold is stored for free. It’s also allocated and reserved storage. If you buy gold from a regular bullion dealer that offers vault storage, you will have to pay storage fees. Rates vary and some require minimum daily, monthly or annual fees. This is not an issue with BitGold/Goldmoney.

Most vaults charge a fee for retrieving stored gold for shipment to you, so BitGold/Goldmoney’s redemption fee isn’t excessive. Shipping fees do seem high for having small amounts of gold sent to you. But I haven’t gone this route yet. Fees probably depend on which vault gold is being shipped from, where it’s being shipped to, and how much gold is in the package. The more gold you want delivered, the less of an impact the shipping and insurance fees will have.

If you regularly send money to other people, BitGold/Goldmoney offers free money transfers which are very easy to put through. It’s even easier than setting up a bank transfer.

Gold preserves wealth so it is an investment in your future. Personally, I’m not treating my investments in gold as speculative investments. I’m investing to maintain my purchasing power in a world where the various currencies are looking increasingly shaky.

For someone who wants to preserve their own wealth and purchasing power, I think BitGold/Goldmoney is a fantastic opportunity to be a part of. You can buy as much or as little gold as you can afford so it’s perfect for small-time investors.

The easiest and cheapest way to redeem your BitGold/Goldmoney is to apply for the prepaid card and load it up from your gold account. After that, having funds transferred to you bank account is the next best and cost effective option.

Adding funds to buy gold and redeeming that gold later is a simple and easy process, all done online from the comfort of your own home.

The latest addition to the platform is the ability for merchants and vendors to accept payment for their goods and services in Gold. This makes them a direct competitor to PayPal, offering the same services but with much lower fees.

I must point out one caveat though. BitGold is a new company, having been formed in 2014 so it does not have a long track record yet. There is always some risk in investing in any new company. That said, since it launched, it now has over 1 million customers and over $2 billion has been invested. It’s grown faster than PayPal did when it launched. Bitgold has now been folded into the Goldmoney brand (its parent company) which has a proven track record going back years.

I regularly buy gold from them now and I feel more secure now that I’m preserving a portion of my wealth, hedging against currency inflation.

So, to answer the question posed at the top of this article – what is BitGold/Goldmoney? It’s a service that really deserves your consideration if you’re at all interested in investing in gold, transferring money on a regular basis or if you sell goods or services online, and it is definitely a good way of investing in gold.

Open your free BitGold Account Now – you’ve nothing to lose!


BitGold founders Roy Sebag and Josh Crumb answer questions about the BitGold and GoldMoney platforms from valued customers in Stockholm, Sweden. BitGold enables users to use gold bullion as a store of value and transactional medium with modern products including a reloadable prepaid MasterCard and BitGold 10g investment grade gold cubes. Why so many townhalls lately? “Our dream… we think there’s a small chance that this could really become big, like PayPal,” Sebag noted during the Stockholm Townhall.

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