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Funding e-gold Through OmniPay
I did quite a bit of information-hunting before I finally funded my e-gold account. There isn't a lot of useful information about the process, so I wanted to share what I've learned.
OmniPay is, on the margin, the least expensive exchange service — they charge 2% over spot. I say "on the margin" because their minimum order size is USD$1000. To make a smaller order you'll have to use some other exchange service and they all charge more than 2% (usually 3%-4%).
OmniPay only accepts funds through bank wire transfer. They don't explicitly say that anywhere on their website; it's left to implication. I learned that there's a very sensible reason for this. The reason is also not on their website — you learn this only after placing an order. While their offices may be in Florida, their bank account is offshore. In Estonia.
In hindsight I should have expected this. No self-respecting gold currency would have a U.S. bank account. It would be farcical. Anyway, to answer what you're thinking, yes I did feel silly when I went to the bank and told them I'd like to wire money to Estonia. But the bank staff was totally professional about it; very cool. In fact, they said the transfer was unusually smooth — I gather that inputting and verifying all the data for an international wire transfer is usually a bit cumbersome.
You should not do a currency conversion. At my bank, the computer displayed a note recommending a currency conversion for that country. Tell them "no". OmniPay's account is dollar-denominated — as it should be, because they're in the business of buying and selling gold, and gold is usually traded in dollars.
This is a roundabout way of telling you that you'll also have to pay a wire transfer fee. Bank of America's fee for an outbound international wire transfer is $45. (Domestic wire transfers are $20.) Interestingly, I couldn't find that information online. E*Trade Bank's fee for all outbound wire transfers, domestic or international, is $25, and you can discover that online.
I did my wire transfer at a Bank of America branch even though it was more expensive, because I wanted to have the personal experience of doing this in a bank. Yes, I get my thrills in strange ways. Besides, the bank staff know me very well and they have a history of being nice to me and making things go smoothly for me.
In my case, it took slightly over two business days (but less than three) to receive my e-gold. I was surprised; that was faster than I expected.
You will pay a spend fee on the e-gold you receive. (This fee is assessed for all transfers into your account.) The maximum fee — which you'll easily reach with any transaction through OmniPay due to the $1000 minimum — is 0.05g or 90¢ at today's gold price. It's tiny; you can basically ignore it. (The spend fee is always very small.)
How does this compare to buying gold bullion directly?
The spreads on gold coins vary with the type of coin, but you'll ordinarily pay around 3-4% above spot. The prices at my local coin shop, AJPM, are very consistently among the best prices anywhere. (And I do keep an eye on these things.) You can usually pay by personal or cashier's check to purchase coins, but unless you're picking them up in person you'll need to pay for shipping, handling, and insurance. For comparison purposes, this is analogous to the wire transfer fee.
Due to the lower spread at OmniPay (2%), and the approximate parity between wire transfer fees and S/H/I, it can be a bit cheaper to buy e-gold instead of bullion coins. … unless you're willing to buy a bunch of Krugerrands. They're very ugly so they have a very small markup. :)
Finally, you need to consider storage fees. The e-gold fee is 1% per year. Compare that against your safe deposit box rental or wherever else you would keep your gold coins.
When you consider all these aspects of the bullion coins vs. e-gold alternative, there is ultimately very little difference. Shades of efficient markets? Shock!