With the recent market turbulence, have you also often heard friends discussing “saving gold” to hedge against risks? Gold, the precious metal regarded as a symbol of wealth since ancient times, always plays the role of an asset’s “stabilizing force” during financial turmoil. However, when it comes to buying gold, many people still picture heavy gold bars that need to be stored in a safe, making it seem daunting and troublesome. In fact, there is a more accessible and simpler way now—the Gold Passbook.
If you’re thinking about starting your gold investment journey or are still unclear about what a “gold passbook” is, this article is for you. I will explain everything about gold passbooks in the most down-to-earth way, including how they work, their pros and cons, how to open an account and trade, and most importantly, whether it’s suitable for you. Let’s unveil the mystery of the gold passbook together and see how this tool can help you start saving gold with ease!
Key Highlights of This Article:
Imagine you have a regular bank passbook, but instead of recording a balance in New Taiwan Dollars or US Dollars, it records the weight of “gold” (in grams). This is the core concept of a gold passbook. It’s a financial service provided by banks that allows you to buy and sell gold online or at a counter, while the bank takes care of storing the gold for you. You don’t need to actually bring gold bars home; all transaction records, gold purchases, sales, and balances are clearly displayed in this “gold ledger.”
Simply put, a gold passbook is a “gold accounting and custody service.” It digitizes the buying, selling, and storage of physical gold, allowing you to participate in the gold market with a lower barrier to entry and greater flexibility, easily achieving the goal of “saving gold.”
Every investment tool has its pros and cons, and the gold passbook is no exception. Before deciding to open an account, it’s crucial to understand its benefits and drawbacks to ensure it meets your investment needs.
Feeling excited? Want to start your gold-saving plan right away? Don’t rush, the process is very simple. Just follow these steps!
In Taiwan, many major banks, including Bank of Taiwan, Taiwan Cooperative Bank, First Bank, and Hua Nan Bank, offer gold passbook services. How to choose? Since gold is a globally priced commodity, the differences in quoted prices among banks are minimal, and the spreads are very similar. Therefore, the key to choosing is not the price, but “convenience.”
Decision-Making Tip: Simply choose your most frequently used salary account or primary bank! Subsequent transactions need to be linked to that bank’s NTD or foreign currency account for deductions. Using the same bank saves you the trouble of inter-bank transfers and is more convenient to manage.
Currently, banks in Taiwan do not yet support online applications for gold passbooks, so you need to visit a branch in person!
Once the account is open, the real fun begins! Taking Bank of Taiwan, which offers the most comprehensive features, as an example, there are generally four mainstream ways to buy, which you can choose based on your investment habits and personality.
Strategy 1: Lump Sum Purchase
Suitable for: Investors who have their own judgment on gold price trends and like to time the market.
How it works: When you feel that the current gold price is at a relatively low point and it’s a good time to enter, you can use a lump sum of funds to buy a specific amount of gold at once. This method tests your sensitivity to the market. A correct purchase might yield good returns in the short term, but the risk is also relatively high.
Strategy 2: Dollar-Cost Averaging
Suitable for: Investment beginners, small-budget investors, and office workers who don’t have time to watch the market.
How it works: This is the most straightforward and suitable strategy for long-term saving. You set a fixed day each month (e.g., payday) to deduct a fixed amount (e.g., NT$3,000) to buy gold. When the price is high, you buy fewer grams; when the price is low, you buy more. Over the long term, your purchase cost is averaged out, effectively diversifying the risk of price fluctuations.
Strategy 3: Gold Piggy Bank
Suitable for: Investors who want to achieve a more extreme cost-averaging effect than dollar-cost averaging.
How it works: This is a unique lazy investment method offered by Bank of Taiwan. You set a total monthly investment amount, and the bank will evenly distribute this amount to purchase gold on every business day of that month. For example, if you set NT$3,000 and there are 20 business days in the month, the bank will buy NT$150 worth of gold for you every day. This “daily deduction” method can further smooth out your cost curve.
Strategy 4: Limit Order
Suitable for: Strategic investors who have a clear target price for buying or selling.
How it works: If you have an ideal buying price in mind (e.g., you want to wait until the price drops to NT$1,800 per gram to buy), you can set a limit order. When the market price reaches your set value, the system will automatically execute the transaction for you. Similarly, you can also set a take-profit or stop-loss selling price.
As mentioned earlier, the spread is the main transaction cost of a gold passbook. Let’s look at an actual example, using Bank of Taiwan’s quoted prices on a certain day:
| Currency | Bank’s Buy Price (You sell to the bank) | Bank’s Sell Price (You buy from the bank) | Spread | Spread Ratio |
| TWD (NT$/gram) | 1,950 | 1,970 | 20 | Approx. 1.01% |
| USD (USD/ounce) | 1,820 | 1,830 | 10 | Approx. 0.55% |
(Note: The numbers above are for illustration purposes only. Please refer to the bank’s official announcements for actual prices.)
From the table, you can clearly see:
This leads to a common question: “Should I specifically exchange for USD to invest for a lower spread?”
The answer is: Not necessarily. If you already have USD assets or are systematically saving USD, then using a USD account to buy gold is a good choice. But if you only have TWD and you specifically exchange “TWD for USD” to buy gold, you will have to bear the exchange rate risk and handling fees twice (once when buying, and again when selling and converting back to TWD). The spread you save might be eaten up by the exchange rate difference. Therefore, for the average investor, it’s simpler to trade directly in TWD and treat the spread as a normal transaction cost without overthinking it.
To reiterate, a gold passbook, like physical gold, is a “non-interest-bearing asset.” Its value is entirely reflected in price fluctuations. Never invest in a gold passbook with the mindset of “earning interest like a fixed deposit.” The capital you invest will only realize capital gains when you sell at a higher price in the future.
A gold passbook is a good tool, but there are other channels for investing in gold, such as Gold ETFs, gold futures, and physical gold. Which one is best for you? The key is to understand your investment goals and risk tolerance.
| Investment Channel | Suitable For | Pros | Cons |
| Gold Passbook | Long-term savers (5-10+ years), investment beginners, dollar-cost averaging enthusiasts. | Secure, convenient, low entry barrier, no additional holding costs. | Higher transaction spread, not suitable for short-term trading, no interest. |
| Gold ETF
(e.g., GLD, IAU) |
Investors familiar with stock trading, looking to include gold in their asset allocation. | Low transaction costs (small spread), extremely high liquidity, can be traded directly in a brokerage account. | Annual management fee required, requires a brokerage account. |
| Gold Futures/CFDs | Professional short-term traders, speculators seeking high leverage. | Can use leverage, can go long or short, 24-hour trading. | High risk, high complexity, expiration settlement pressure, not suitable for beginners. |
| Physical Gold (Bars/Jewelry) | Extremely conservative individuals, those who prefer physical assets, people looking to pass on assets. | True ownership, no counterparty risk, has inheritance value. | Difficult to store, very high bid-ask spread, poor liquidity, troublesome to appraise. |
The conclusion is clear: If you’re just looking to profit from gold price fluctuations and trade relatively frequently, the lower-cost Gold ETF would be a better choice. But if you see “saving gold” as a long-term savings habit, planning to hold for five, ten years or more without frequent trading, then the convenience and no-holding-cost advantages of a Gold Passbook become prominent.
💡 Recommended Article
Want to learn more about foreign exchange knowledge and investment skills? Click the link below to master more financial knowledge!
In summary, the gold passbook is an excellent entry-level tool for “saving gold.” It successfully lowers the barrier to gold investment, making it accessible to the general public. Its core value lies in providing a channel for “long-term, disciplined gold savings.”
Please discard any fantasies of getting rich overnight with a gold passbook. It’s more like a steady, reliable guardian of wealth, not a racehorse chasing excitement. Before you invest, ask yourself: What is my goal? Short-term speculation or long-term value preservation?
If you’re pursuing the latter and hope to add a stabilizing force to your asset portfolio in turbulent times, then walking into a bank, opening your own gold passbook, and starting your dollar-cost averaging plan is definitely a wise decision.
No. As of now, all banks in Taiwan require you to go to a branch in person with two forms of ID and your personal seal to open a gold passbook account. However, once the account is opened and linked to online banking, all subsequent buying and selling can be done online.
It depends on whether you hold US dollars. The spread for USD transactions is usually lower, but if you need to exchange TWD for USD to buy, you’ll incur exchange rate risk and conversion costs. For general small-amount, long-term investors, trading directly in TWD is the simplest and most convenient option, avoiding the extra risk of exchange rate fluctuations just to save a little on the spread.
Yes, but it is highly discouraged. Converting the gold balance in your passbook into physical gold (like bars or nuggets) will incur high “conversion and withdrawal fees” from the bank. These fees are much higher than the spread you would pay if you bought gold bars directly from a jeweler. The gold passbook is designed for convenient trading, not for physical withdrawal.
The biggest differences are the “transaction cost structure” and the “suitable investment horizon.” The main cost of a gold passbook is the “bid-ask spread” (about 1%), but there is no annual management fee, making it suitable for long-term holding. A Gold ETF has a very low bid-ask spread but requires an annual “management fee” (about 0.2%~0.4%). Its transaction cost increases with the holding period, making it more suitable for medium-to-short-term trading or asset allocation.
Yes. Profits from buying and selling gold through a gold passbook are considered “income from property transactions” and should be declared as part of your individual consolidated income tax in May of the following year. If you have losses, they can be deducted from property transaction income over the next three years. Banks usually do not proactively send tax withholding statements, so investors need to calculate their own profit and loss and declare it honestly.
